Govt gains Rs 89,458 crore since Coalgate lows

It’s not just the image of the government that has skyrocketed over the past two weeks. The paper wealth of the union government went up by a whopping Rs 89,458 crore since the coalgate induced lows hit in early September.

According to a BS Research Bureau analysis of some 47 listed state-owned firms, the combined value of the government’s holdings in these firms went up from Rs 11.21 lakh crore to Rs 12.10 lakh crore, a gain of 7.97 per cent. 44 of these 47 companies ended with gains during the period beginning September 5, the day on which Sensex closed at the recent low of 17,313.

The biggest gains for the government came from its holdings in the 20 banks. As most top banks gained over 20 per cent, the sector added Rs 37,525 crore to the government wealth. While State bank alone contributed Rs 15,720 crore to this, Canara Bank was the largest gainer during the period zooming 35 per cent.

The divestment-bound firms added Rs 19,978 crore to the government’s paper wealth. SAIL, which gained 21 per cent, NMDC and BHEL were the biggest contributors. Among the nine firms in the category only OIL India ended up seeing a marginal erosion in value. The stock fell 1.27 per cent shaving off Rs 290 crore.

Company	Gain in value of holdings (Rs crore)
STATE BANK OF INDIA	15740.69
OIL & NATURAL GAS CORP LTD	12052.37
COAL INDIA LTD	7702.80
STEEL AUTHORITY OF INDIA	5724.67
NMDC LTD	4960.09
BHARAT HEAVY ELECTRICALS	4027.85
POWER FINANCE CORPORATION	3751.15
BANK OF BARODA	3719.68
CANARA BANK	3360.00
PUNJAB NATIONAL BANK	3211.76

Among the remaining 18 firms, which accounted for gains of Rs 31,954 crore, ONGC and Coal India were the top contributors. Two of these, Hindustan Petroleum and Powergrid fell marginally losing 1.6 per cent and 2.16 per cent respectively.

The Sensex has since gained nearly 1500 points in a space of two weeks riding on key government decisions such as deferment of General Anti-avoidance Rules, hike in diesel/LPG prices and foreign direct investment in retail and aviation. The government’s decisions have enthused analysts and foreign investors, who are looking for credible opportunities to invest cheap money unleashed by Federal Reserve and European Central Bank.

Analysts say the reform push of the government should continue for the market to go up further. “We are enthused by the reform initiatives announced by the Government. These initiatives open the doors for foreign monies to flow in. However, we believe that, these will now have to be followed-up by some of the core reforms, which will encourage further investments in the manufacturing segment and hence, attract more money,” said Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities said in a note. 

Shah hoped that further progress on issues like power, mining and land acquisition will provide a much-needed fill-up to investments, which have been held back till now. "The markets will take cues from these initiatives to stabilize and move up further," he added.