Select PSUs rally on 'in-principle' nod for strategic disinvestment

Shares of select public sector undertaking (PSU) rallied up to 20 per cent on the BSE after the Government gave ‘in-principle’ approval for strategic disinvestment of 28 Central Public Sector Enterprises (CPSEs) with sale of majority stake of Government of India and transfer of management control.

Hindustan Petroleum Corporation (HPCL) and Dredging Corporation of India are among 28 CPSEs, which have been approved 'in principle' for strategic disinvestment by the Cabinet Committee on Economic Affairs (CCEA), Minister of State for Finance and Corporate Affairs Anurag Thakur informed the Lok Sabha on Monday.

Dredging Corporation of India was locked in the upper circuit of 20 per cent at Rs 392 on the BSE. The stock witnessed 28-fold jump in trading volumes today. A combined 4.8 million shares, representing 17 per cent of total equity of the company, changed hands on the BSE and NSE till 03:00 pm.

The company offers four types of dredging services, namely maintenance dredging, capital dredging, beach nourishment and land reclamation. They do dredging mainly for Indian seaports, though occasionally they dredge at foreign seaports in countries such as Taiwan and Dubai.

Bharat Petroleum Corporation (BPCL) hit a new high of Rs 548, up 6 per cent, while Shipping Corporation of India (up 11 per cent at Rs 69.65) and India Tourism Development Corporation (ITDC) (up 10 per cent at Rs 419) touched their respective 52-week highs on the BSE.

Scooters India was locked in upper circuit of 5 per cent at Rs 33.70, while Hindustan Petroleum Corporation (HPCL) gained 4.5 per cent to Rs 303 in intra-day trade today.

Besides, in certain other CPSEs, policy of minority stake sale without transfer of management control through various SEBI approved methods, are being followed in order to unlock the value, promote public ownership and higher degree of accountability.

The Minister further stated that the Cabinet Committee of Economic Affairs (CCEA) is mandated to approve strategic disinvestment of CPSEs. There is no approval yet of the CCEA with regard to strategic disinvestment of BPCL, Container Corporation and Shipping Corporation of India. CLICK HERE TO FULL LIST

PSU stocks in focus: Bharat Electronics, ITDC hit 52-week high

Shares of public sector undertaking (PSU) companies made major moves on exchanges, ralling by up to 25 per cent on the BSE, on Friday on the back of heavy volumes.

Shares of Bharat Heavy Electricals (BHEL), Hindustan Copper, MMTC and The New India Assurance Company surged more than 11 per cent, while MOIL, NBCC (India), NLC India, General Insurance Corporation of India (GIC Re), National Aluminium Company, Steel Authority of India (SAIL), IFCI and Shipping Corporation of India (SCI) jumped in the range of 5-10 per cent on the BSE.

Furthermore, Bharat Electronics (up 7 per cent at Rs 121) and India Tourism Development Corporation or ITDC (up 4 per cent at Rs 368) hit their respective 52-week highs in the intra-day today.

At 10:28 am, S&P BSE PSU index was up 1.5 per cent at 6,812 points, as compared to a 0.40 per cent rise in the S&P BSE Sensex. In the past one week, the PSU index has soared 5.5 per cent as against a 2.7 per cent gain in the benchmark index.

Prior to current week, the S&P BSE PSU index had slipped 19 per cent from its 52-week high of 7,954, touched on June 4, 2019. In comparison, the S&P Sensex was down 5 per cent during the same period.

According to Business Standard report, the Cabinet Committee on Economic Affairs (CCEA) is next week expected to take up a proposal to reduce the government’s stake in a number of state-owned companies below 51 per cent. This move is different from privatisation as the Centre will continue to hold a majority stake in these companies and they will still be classified as public sector enterprises. CLICK HERE TO READ FULL REPORT

Among the individual stocks, shares of BHEL surged 25 per cent to Rs 55.65 on the BSE in the intra-day deals on Friday amid reports the government may look to reduce stake in the company. The stock recorded its sharpest intra-day rally in more than a decade. Earlier, on May 18, 2009, it had zoomed 29 per cent in the intra-day trade on the BSE.

According to hindi business news channel CNBC Awaaz, Centre may consider bringing down its stake in state-owned BHEL and National Mineral Development Corporation (NMDC). The stake in BHEL may be pared in tranches to 26 per cent from 63.17 per cent now. An inter-ministerial group is expected to meet soon to discuss the stake sale, the channel reported, quoting sources.

Similarly, the stock of New India Assurance has zoomed 56 per cent in the past one week, while GIC Re has surged 34 per cent after a news report suggested that insurance sector posted a substantial growth rate in premiums.

COMPANY LATEST PREV CLOSE GAIN(%)

B H E L 54.70 44.55 22.8

HIND.COPPER 36.45 32.30 12.9

MMTC 17.45 15.55 12.2

NEW INDIA ASSURA 151.50 136.50 11.0

J & K BANK 32.20 29.65 8.6

MOIL 143.80 133.35 7.8

NBCC 36.85 34.30 7.4

GENERAL INSURANC 280.95 264.40 6.3

NLC INDIA 56.40 53.10 6.2

NATL. ALUMINIUM 42.70 40.40 5.7

INDIAN BANK 123.30 117.55 4.9

S A I L 35.10 33.55 4.6

IFCI 6.82 6.52 4.6

H U D C O 34.65 33.20 4.4

CORPORATION BANK 14.45 13.90 4.0

R C F 49.75 48.00 3.7

S C I 44.50 42.95 3.6

IRCON INTL. 380.80 367.60 3.6

G M D C 60.10 58.20 3.3

NMDC 105.50 102.20 3.2