Psu Scrips Surge On Selloff Eve

Stocks of public sector undertakings (PSUs) were in the limelight today on hopes that the government may announce the much-awaited divestment in several companies at a meeting of the Cabinet Committee on Disinvestment (CCD) later this week.

However, analysts feel that although the decision on divestment of the PSUs concerned is unlikely to be taken in the meeting, the outcome would indicate the government's seriousness to privatise the public sector. "Any positive decision on the divestment front would help PSU stocks," said an analyst.

Refinery major Hindustan Petroleum Corporation (HPCL) today gained 4.85 per cent to close at Rs 135. While capital goods manufacturer BHEL was up 3.95 per cent to Rs 152.50 and basic telephony operator, MTNL, rose 2.3 per cent to Rs 138.15. Other PSU stocks such as ONGC rose 3.67 per cent to Rs 149.80, Engineers India was up 3.15 per cent to Rs 90.10, Steel Authority of India perked up 2.27 per cent to Rs 4.50, Bharat Electronics was up 1.43 per cent to Rs 63.95 and Hindustan Zinc inched 0.63 per cent to Rs 24.

Meanwhile, IPCL surged 6.79 per cent to Rs 43.25 on reports that it will be referred to the CCD for an outright sale. The group of ministers (GoM), constituted for the disinvestment in IPCL has recommended the outright sale of the company. The group will refer the proposal to the CCD.

The group was set up about a month back to chart the course of IPCL's privatisation after differences emerged over which route should the divestment take. The disinvestment ministry wanted to revert back to the earlier route from the stage at which it was abandoned. This means calling financial bids from Reliance and the IOC-Soros-Chatterjee consortium, the only bidders left in the fray.

Standalone marketing major IBP was shot up 8.11 per cent to Rs 354 firmed on news that the department of disinvestment will open the bids for its 33 per cent stake on December 24. Reports say the bidders for IBP will receive the share purchase agreement by early-December. The draft of the agreement has already been prepared.

Disinvestment Minister Arun Shourie had earlier announced that the bidding process for IBP would be completed by the last week of December. Twelve companies, including global petroleum majors Shell, Totalfina-Elf, Kuwait Petroleum and BP Amoco, have participated in the bidding.