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Even as the Cabinet has given its nod to the PSUs to buy back their own shares, there appears to be no rush, at least immediately, among the investors to grab potential PSU stocks.
The BSE-PSU index did not show any unusual movement. The fact that PSU banks have a large weightage on the index may have been a factor for this, since of the 60 stocks in the PSU index, PSEs that qualify for it make for only 35 of them.
The lukewarm investor response could be because though the Government had given in-principle nod for the proposal, there is no information as yet of any specific time-frame for it.
It is also not clear as to how many companies would come forward for this and what impact it would have on their investment plans if they use their surplus cash for buyback.
Some of the cash-rich PSUs like NTPC, ONGC, Coal India, MMTC and STC witnessed mixed fare. NTPC saw its price decline by Rs 3.55 to Rs 177.30. ONGC too fell marginally to Rs 291.80, a loss of Rs 1.55. Coal India was at Rs 337, an increase of Rs 3.85.
But MMTC and STC saw some significant gains. MMTC was up by 23.20 at Rs 870.25 while STC jumped by Rs 13 to Rs 273.45. However, shares like REC, BEML, Nalco, NLC etc did not show any significant price movement.
That the announcement failed to fire investor enthusiasm is evident from the fact that the Sensex is down by about 190 points much after the news was flashed across the TV channels.
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