The Hindu Business Line : Disinvestment blues for PSU stocks

PSU stocks, especially those on the disinvestment list, took a hit in Thursday's trading as traders believed that the privatisation process could be delayed under the new government likely to be formed by the Congress along with the Left front.

Brokers and analysts said the Left parties are known to be against disinvestment, and the stock market has taken it negatively.

After the exit polls, PSU stocks were the worst affected, with the BSE's PSU index down by 9.76 per cent in the last week. In Thursday's trading, the index was down 2.77 per cent. In comparison, the BSE Sensex was down 6.22 per cent in the last week, the BSE 100 by 6.49 per cent, the BSE 200 by 6.81 per cent and the BSE 500 by 6.85 per cent.

The PSUs that were hit badly on Thursday include HPCL. The stock price of the company was down by 7.62 per cent at Rs 378.10 on the BSE. The stock market has been expecting the strategic sale of the company.

Similarly, Engineers India was down by 2.70 per cent at Rs 320.35, Shipping Corporation declined by 6.85 per cent at Rs 104.10. RCF, also on the disinvestment list through strategic sale, was down by 14.42 per cent at Rs 37.70. However, the Gail (recently divested through public offer) stock closed marginally higher at Rs 204.25.

Mr Ambarish Baliga, Vice-President, Karvy Stock Broking, said, "Fall in PSUs stocks is due to fear that the Congress-led Government along with Left parties could lead to some roadblocks to disinvestment."

Mr Ravi Malani, Assistant Vice-President, ILFS Investmart India, also echoes his views. "People in the market have a feeling that if Left parties support the new government, the disinvestment process may slow down."

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