It?s not just India?s captains of industry that are richer thanks to the country?s booming stock markets. The government has also seen the value of its PSU holdings more than double in less than a year. A study carried out by FE indicates that the value of government shares in state-owned companies increased by 101.3% over the last 11 months, much of it thanks to the surging share price of mining and metal sector stocks.
The government of India is richer by nearly Rs 4,71,950 crore from its holdings in 38 listed PSUs, since January this year alone. As on November 30, 2007, the government?s holding in these companies was worth Rs 9,37,814 crore, double their value of Rs 4,65,864 crore on January 2, 2007.
Metal trading giant MMTC showed the largest wealth growth, making the government richer by Rs 1,40,599 crore from the beginning of 2007. Its share price has zoomed from Rs 2,200 on January 2 to Rs 30,509 now. Next in line is power sector behemoth NTPC, which has garnered an extra Rs 72,763 crore during the period for the government.
Overall, the sentiment for PSU stocks has been favourable, with most of them recording substantially higher returns than the market as a whole. While the BSE Sensex has increased by 38.9% to 19,363.19 points on November 30, 2007 from 13,942.24 points on January 2, 2007, the BSE PSU Index rose 58.3% to 9,613.32 from 6,073.31 points.
Though the share price rise has been spectacular, in some cases they have not translated into significant gains for the exchequer given the inherently small size of these companies. One such company is Tide Water Oil, which has seen its share price rise by over Rs 2,118.35 in absolute terms, but added a meagre Rs 51 crore to the government?s kitty.
