MUMBAI: In just one session on Friday, Dalal Street made North Block richer by over Rs 50,000 crore, before government sold even one share in its
The stocks of government-run companies were on a roll — thanks to the government's decision that at least 10% more stake in all listed PSUs will be divested — as investors rushed in to lap up these scrips.
Consequently, the total market capitalisation of 48 PSU companies went up by about Rs 62,000 crore with the government's share in this increase at about Rs 50,000 crore.
The hectic buying in PSU counters led to some of these stocks hitting the upper circuit limit. For example, MMTC closed the day 20% up at Rs 36,147, while NMDC ended 10% up at Rs 338. Both these are highly illiquid counters because public holding in both these companies is less than 2%. While in MMTC the government holds 99.33%, in NMDC the corresponding figure is 98.4%. ‘‘The government's decision to divest will lead to higher level of floating stocks in these counters and hence the euphoria around these stocks,'' said a dealer at a local brokerage.
Among the 49 listed PSUs, only MTNL ended in the red. Seemingly this was because the government holds 56% in this telecom company and will probably not divest 10% in it due to political and union pressures, market players said.
On Thursday, home minister P Chidambaram, who was earlier the finance minister, announced the government's decision about divestments in PSUs. He also said the government will divest stakes in all the profitable PSUs through public offers.
Market players pointed out that usually decisions about divestments are announced by the finance ministry but in this case it was the home minister who did so. In Friday's market, delivery volumes also went up substantially in most of the PSU counters.
Src: Economictimes < Selloff boon: Govt richer by Rs 50k cr in 1 session >