Psu Stocks Shimmer On Vsnl, Ibp Selloff
Stocks of all major public sector undertakings (PSUs) surged following the divestment of IBP and VSNL to Indian Oil Corporation (IOC) and the Tatas, respectively. The biggest gainers were telecom and oil shares, which were backed by high volumes.
Among oil PSUs, IBP was locked at the 20 per cent upper limit of Rs 861.40 on the Bombay Stock Exchange, IOC was locked at the 20 per cent upper limit of Rs 178.05, Bharat Petroleum Corporation Ltd was frozen at the 10 per cent upper limit of Rs 268.55, but closed marginally lower at Rs 266.90 and Hindustan Petroleum Corporation Ltd was locked at the 10 per cent upper limit of the day at Rs 211.55, but later receded to close at Rs 204.95.
Kochi Refineries was up 6.50 per cent to Rs 32.75. Gas Authority of India (Gail) was up 4.63 per cent at Rs 81.30, Oil and Natural Gas Commission was up 4.38 per cent at Rs 164.60 and Chennai Petroleum was up 2.70 per cent at Rs 22.80.
Among telecom PSUs, basic telephony major MTNL surged 5.4 per cent to Rs 130.45.
PSUs other than those in the refinery and telecom sector also got a boost from the divestment news and hit their intra-day highs- Container Corporation of India surged 7.6 per cent to Rs 267.05, Shipping Corporation of India rallied 7 per cent to Rs 42, Bharat Electronics surged 6.7 per cent to Rs 129.40. However all these shares receded at the end of trading sessions on profit taking but managed higher levels over previous closes.
What boosted the telecom and refinery shares was attractive divestment prices of VSNL and IBP. Tatas won the bid for VSNL at Rs 202 a share which analysts say is attractive. The bid works out to about 21 per cent premium to the ruling market price of VSNL share at Rs 168.80. VSNL shares ruled flat after the announcement.
On the other hand, IOC won the bid for IBP. The IBP bid was sealed at Rs 1,551 a share, which works out to a whopping 80 per cent premium to the ruling market price of Rs 861.40.
Analysts say that a good divestment price for VSNL and IBP would boost both shares of refinery and telecom PSUs, which would be up for divestment in the future.