INSUBCONTINENT EXCLUSIVE:
If you are still undecided what to do with your IRCTC shares, here is cue.
No matter how good or bad the listing performance, PSUs have a
record of a faltering post listing
Of the 17 central public sector enterprises that came out with their initial public offering (IPO) in last 10 years, 13 have given negative
returns since their listing
Indian Railway Catering and Tourism Corporation (IRCTC) more than doubled share price on debut on Monday.
Take for instance, The New India
It has created a splash at the time of its listing in November, 2017
Ever since, it has been the biggest loser among PSU IPOs, eroding about 90 per cent of value
Since November 2017, the stock has crashed from an issue price of Rs 800 to trade at Rs 97.20 on Friday.
Energy sector giant Oil India,
which was listed in 2009, has since shed 85 per cent of its issue price.
Half of the PSU IPOs in the last 10 years debuted at a discount and
most of them have continued to slide from there on.
Deven Choksey, Managing Director of KRChoksey Investment Managers, blames unnecessary
governmental interference for such performance
That is one thing which is very obvious
any different, given high governmental stake in it
Till the time the government brings down its stake, it will continue to interfere in the businesses
Also, I think its approach will be quite different from a normal private sector company
Given that kind of equation, it is very difficult to say the success of listing would get translated into further successes in the
Vedanta acquired a majority stake in the loss-making venture in 2002-03 and since then it has been turned into one of the largest zinc
producers in the world.
Among the PSU stocks that today trade higher than their issue prices, each one is in the market for less than 18
months.
And their post-listing performance has not been exciting
Rail Vikas Nigam, which got listed earlier this year, is up 35 per cent.
Deepak Jasani, HDFC Securities, is positive about the
attractively and there is assured business for them
The current PEs are quite reasonable
There are upsides there also
[However,] the dependence on railways is a negative in terms of client concentration risk and possible policy changes that can hurt such
similar upside on listing.
The government is planning to sell stakes in other PSUs like BPCL, BEML, Concor, Shipping Corporation of India,
A group of secretaries approved the plan last month.
Sanjiv Bhasin, EVP - Markets at IIFL Securities said there could be turnaround for PSU
stocks if the planned strategic sales go through
If that happens, it will set the cat amongst the pigeons, particularly if BPCL and Air India go through
We are looking forward to the privatisation of BPCL, which would see a rerating of all PSU stocks across the board in the next three to six
He said it could turn out to be a D-Mart or IndiGo
And, if you actually privatise the railways then IRCTC could gain on that account