State PSUs’ scrips see rise of 4-7%, defy meltdown
STOCK prices of the state PSUs have risen 4-7% over the last three trading session with the expectation gaining ground amongst the investors and stock brokers that BJP would form the next government. With the exit polls indicating a BJP government, the PSU scrips braved the global meltdown to remain stable with minor corrections. Despite the sensex crashing 769 points on Monday on fears of foreign investment slowing down in the wake of rising inflation in the US, Gujarat PSU scrips held ground. Market sources told ET that there is strong sentiment amongst the investors regarding re-election of the Modi government. "Expectations are running high amongst the investing community as they believe that the Modi's government would accelerate the disinvestment process of the state's PSUs once back to power," said an market expert. At present the PSUs are undervalued and a huge value unlocking could be seen in next few months. Even though in last three trading sessions, Sensex closed in the negative zone, the listed state PSUs scripts recorded a surge. On Friday, one of the strong contender of disinvestment - Gujarat Alkalies stood at Rs 223.25 by gaining 6.44% compared to last close. While, GNFC stood at Rs 198.05 and gained 4.29% compared to its last closing price, other state PSUs such as GIPCL (4.29%), GSFC (4.94%) and Gujarat State Financial Corporation (4.96% ) too witness the jump in its stock prices. On Monday, Gujarat Alkalies and GIPCL recorded their 52-week highs at Rs 234.35 and Rs 126.75 respectively, before closing at Rs 223.60 and Rs 115.80 respectively. Gujarat State Financial Corporation also registered its 52-week high on Monday at Rs 25.55 before closing at Rs 24.35. In the past, the Modi's government had initiated the process of disinvestment of GACL which failed to take off. Deven Choksy, managing director of Mumbaibased stock broking firm K R Choksy, believes that with Modi coming back to power at Gandhinagar, the state would expedite the disinvestment process to create a reformist image of the BJP. With the Parliament election due in 2009, the reformist image of the BJP government would be capitalised for its gain in other parts of the country. Stock market researcher and assistant professor at Chimanbhai Patel Institute of Management Sandeep Shroff says that with the absence of the Leftist party within the state, divestment for the government would be a cakewalk