PSU Stock Selloff Erodes Rs 4.28 Lakh Crore In Investor Wealth In Three Sessions
Life Insurance Corp. of India shares caused the most wealth erosion, as they witnessed a decline of over Rs 79,000 crore in the last three trading sessions.
As public sector undertaking stocks saw a significant downturn in the last three trading sessions, investors saw substantial wealth erosion, exceeding Rs 4.28 lakh crore. The Nifty PSE recorded a decline of 5.49% during this three-session period.
The stock causing the most significant wealth erosion was Life Insurance Corp. of India Ltd., witnessing a decline of over Rs 79,000 crore in the last three trading sessions.
This was followed by NHPC Ltd., whose shares fell 23.65% in the last three sessions; Oil India Ltd., REC Ltd. and Steel Authority of India Ltd.
In NSE PSU Banks, Indian Overseas Bank witnessed the most shedding of market capitalisation, followed by UCO Bank and Union Bank of India. The index fell as much as 2.35% in the last three sessions.
"We have seen some volatility in this space, with profit booking taking place. The correction that has happened has also given a very good buy-on-dip strategy, especially in stocks like NTPC, Coal India, ONGC... These stocks have come to the level where investors can reinitiate longs and ride the momentum for another 5-6% upside," said Soni Patnaik, assistant vice president, equity derivatives research at JM Financial Services Ltd.
On Feb. 7, Prime Minister Narendra Modi said the net worth of public sector utilities has seen a big jump, while their performance has steadily improved in the last 10 years of his government.
"The people's trust in the PSUs has increased in the last 10 years and so has their performance," Modi had said in the Rajya Sabha, while replying to the President's address.
The net worth of PSUs jumped to Rs 17 lakh crore in 10 years from Rs 9.5 lakh crore. The net profit was around Rs 1.25 lakh crore in 2014 and now it is Rs 2.5 lakh crore, the Prime Minister said.
"LIC shares are hitting a record high today," the PM had said, referring to the insurer's market capitalisation crossing the Rs 6 lakh crore mark after its shares surged over 8% to an all-time high last week. The state-owned insurer's share price also crossed the Rs 1,000 apiece mark for the first time.
"The BSE PSU index has doubled in value in the last year," Modi had said. The index has gained 94.8% since February 2023.