PSUs more or less unscathed by market meltdown -Governance Now

PSUs more or less unscathed by market meltdown

The state-owned entities have only lost Rs 19,350 crore against Rs 8.1 lakh crore by all listed companies

GN Bureau | November 23, 2016

#PSU #meltdown #state-owned

Public sector units (PSUs) have suffered less compared to others amid the current market meltdown, limiting notional loss in market value for exchequer, reported Business Standard.

The average decline in the PSU pack has been only 1.6% even as benchmark indices fell over seven per cent since November 8, the day when the Rs 500 and Rs 1,000 currency notes were scrapped.

In terms of market value, the state-owned entities have only lost Rs 19,350 crore against Rs 8.1 lakh crore by all listed companies.

This outperformance of PSUs was largely on account of strong performance by public sector banks (PSBs), which have largely registered gains since the move to ban certain notes, the media report said.

“The Indian banking sector, especially PSBs, is reeling under bad debts and needs recapitalisation. Diverting funds from note-ban windfall to PSBs’ recapitalisation can improve the health of PSBs and have positive spillovers for the rest of the economy. Further, progress towards a cashless economy will provide a boost for savings in financial assets, which is structurally positive for intermediaries like banks,” Ravi Muthukrishnan, co-head of research at ICICI Securities, was quoted as saying.

Oil and power PSUs such as ONGC, Oil India and Petronet LNG have done well during the period.

The media report said that this outperformance of public-sector stocks has also provided some relief to the government, which has lined up several divestment issues in the next four months to meet its ambitious disinvestment target of Rs 56,500 crore for 2016-17. Of this, the government has so far garnered Rs 21,400 crore, data from Department of Investment and Public Asset Management showed.

Comments

Other News

Before India voted, the framers worried about the referee

“We are making a Constitution forever and not only for today.” Shibban Lal Saksena said this in the Constituent Assembly on June 15, 1949. He was warning that a ruling party might one day choose a loyalist to run India’s elections. Seventy-seven years later, the Supreme Court is wrestli

Delhi moves to real-time traffic management

The Cabinet Committee on Economic Affairs (CCEA), chaired by prime minister Narendra Modi, has approved implementation of the ITMS Project by Delhi Police at an estimated cost of Rs.1,789.52 crore, inclusive of taxes. The project will cover 42 identified traffic corridors and will be implemented in three

MDR on UPI: Can sustainability come without weakening the network?

The extraordinary transaction volumes and value (₹29.82 Lakh crore in August 2026 alone) of the Unified Payments Interface (UPI) have made it not only an Indian success story, but a global one. In 2024, UPI accounted for nearly 49% of the world’s real-time payment transaction volume, with more th

The Xi-Trump summit: The unending rivalry

Diplomacy is akin to an art, wherein the summitry, conflict resolution and negotiations form apt constituents of the entire context of deal making and “playing for keeps” in the international arena. The Xi-Trump summit in Washington last week, in which the American president broke all conside

“Indians, yet treated like outsiders”

Moving to Delhi-NCR for education can be an exciting experience for students from Northeast India. It gives us a chance to meet new people, experience a different culture and become more independent. But living away from home also comes with challenges that people who have not experienced them may not al

Import duty on major edible oils cut

The government has reduced the Basic Customs Duty (BCD) on major imported crude edible oils with a view to moderating domestic edible oil prices, providing relief to consumers and mitigating inflationary pressures arising from the sharp increase in international edible oil prices.