Jagannadham Thunuguntla, equity head, SMC Capitals Ltd, said: The bear market has eroded the wealth of all kinds of shareholders, be it retail or institutional. The government is also not an exception to this. Actually, in the case of the government, this has more severe implications, as this bear run has forced it to shelve several PSU public issues.
Shareholders of MMTC, SAIL and ONGC have lost significant wealth since January 3, 2011. Says, Kishor P Ostwal, CMD, CNI Research, the lack of clarity on the governments disinvestment plan has hurt the market sentiments about PSU stocks. Government holding in MMTC is 99.33%, Its holding in SAIL is also over 85.80%, and in ONGC 74.14%.
The government stake in MMTC is now down by R62,000 crore this year. The trading majors share price has declined from R1,169 to R540 between January 3 and November 25.
The market environment for PSU stocks has not been favourable, with most of them recording substantial negative returns. While the BSE Sensex fell by 23.7% during the period, the BSE PSU Index was down 29.7%. Nearly 92% PSUs showed a decline in market capital during the period.