The government of India has gained significantly during the recent bull run in the stock markets with about 44 state-run entities (excluding banks and NBFCs) adding Rs 5.56 lakh crore in market value during the last one year.

According to an analysis of the share price movement of state-run firms since March 9, 2009, the market capitalisation of companies with promoter holdings of central or state governments has increased by 93%, from Rs 5.97 lakh crore on March 9, 2009, to Rs 11.53 lakh crore on March 9, 2010.

Jagannadham Thunuguntla, equity head, SMC Capitals Ltd, said: ?PSUs have strong balance sheets, reliable revenue streams and tried-and-tested business models. In the industries where they operate, these companies often enjoy virtual monopoly situations. All these factors make PSUs favourities among the capital market circles. For those investors who seek stable returns, PSUs have proven to be perfect bets.?

The promoters of three most valued PSU firms ?? oil exploration giant ONGC, commodity trading firm MMTC and mining company NMDC ?? have contributed more than half of the total gains during the previous one year.

Government holding in MMTC is 99.33%, while in NMDC it is 98.38%. Its holding in ONGC is over 74%, and the same is 89.5% in NTPC. Bhel and SAIL have government holdings of 67.72% and 85.82%, respectively.

Trading giant MMTC has gained the highest amount of wealth, with the government stake in the company now worth Rs 1.02 lakh crore more than it was on March 9, 2009. From a price of Rs 13,081.80 on March 9, 2009, the share is currently worth Rs 33,650.65. In hot pursuit is another company in the mining sector, NMDC, where the government stake gained Rs 91,000 crore in market capitalisation during this period.

The environment for PSU stocks has been extremely favourable with most of them recording substantially positive returns than the market as a whole.

While the BSE Sensex has increased by 108.97% to 17,052.54 on March 9, 2010, from 8160.40 on March 9, 2009, the BSE PSU Index also gained by 96.5% to 9187.22 from 4675.53.

Though the increase in share price has been spectacular in some other cases, it has have not translated into larger wealth creation for the government, given the inherently small size of these companies.

Thus, a company such as Tide Water Oil has seen an increase by over Rs 1742.55 in terms of absolute share price, but added only Rs 36 crore in wealth. An increase of Rs 33.25 in share price in the case of TN Newsprint added Rs 81 crore in wealth. Not only trading stock showed a significant increase in market capitalisation, some other companies like SAIL also showed bullishness.

Consider the M-Cap of government stake in SAIL, which increased by 211.6%, or ONGC, which increased by 64.5%.

More than 400% increase in market capitalisation was noticed in the case of Hindustan Copper.

On the other hand, less than 50% increase in government wealth was witnessed in the cases of six public sector units, including BPCL and HPCL.