It’s not just the government that has raked in big money from selling stake in public sector undertakings via offers-for-sale. Most retail investors too have been rewarded.

According to data provided by Prime Database, 23 PSU firms have raised close to ₹1 lakh crore since 2012 through the OFS route; of these, only nine are trading below their issue price.

The nine companies are NMDC, Oil India, Steel Authority of India, MMTC, Hindustan Copper, Coal India, Engineers India, Power Finance Corporation and NBCC (India).

Of the 14 others, only Rural Electrification Corporation is trading at almost the same level as its offer price; the rest have given substantial returns since their offerings. Their stock prices are up by at least 10 per cent, and by as much as 210 per cent over the past year.

“PSU offers have also been timed right,” said an independent analyst. UR Bhat, MD, at Dalton Capital Advisors (India) Pvt Ltd, points out that “PSU companies are priced right.” Plus, he adds, “retail investors get a discount on the issue price as compared to IPOs.”

Cash-rich, low on debt

These companies have been able to offer good returns either because they are cash-rich or have little or no debt. Companies operating in favourable business environment such as chemicals, select metals (including mining), defence and shipping/ logistics have also given positive returns despite being in debt or holding relatively less cash.

These companies are: NTPC, Rashtriya Chemicals Fertilisers, National Aluminium, National Fertilisers, ITDC, STC, REC, Dredging Corporation of India, IOC, Container Corporation of India, NHPC, MOIL and Bharat Electronics.

The consolidated debt-to-equity ratio of these companies for FY17 ranges from zero to around 0.5 times, according to Capitaline data Very few companies have debt-to-equity ratio in excess of 1.

Those that gave negative returns mostly operate in difficult environments. Oil India and Coal India have given the most negative returns.

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