Psus Flip On Divestment Blips

Public sector undertakings stocks today tanked on continued negative rumours and reports including one that suggested disinvestment in all PSUs is likely to be put off till March 2003.

The major PSU losers were HMT down 17.87 per cent to Rs 17, RCF down 16.04 per cent to Rs 13.35, Neyveli Lignite down 4.31 per cent to Rs 18.85, Shipping Corporation down 14.93 per cent to Rs 72.65, Nalco down 6.20 per cent to Rs 90.05, HPCL down 3.94 per cent to Rs 197.30 and BPCL down 2.21 per cent to Rs 201.55.

As a result, the BSE PSU Index fell a hefty 33.50 points or 2.30 per cent at 1423.95 over its Friday close. Since September 4, the BSE PSU Index has lost 10.59 per cent or 168.61 points from 1,592.56. Prior to that, between January 30 and September 4, the BSE PSU Index witnessed a rise of 64.7 per cent from 966.56.

The reports of delay in disinvestment of PSUs such as RCF and HMT and reports about the Opposition's and several trade unions' calling for a 12-hour strike in Orissa on Thursday to protest against a decision to privatise aluminium PSU Nalco is reversing the earlier upbeat sentiment for PSUs.

Rumours have also gained that the government is either not interested in selling off fertiliser unit (NFL) or is against raising fertiliser prices which affected fertiliser PSU counters.

Rumours that the disinvestment minister Arun Shourie may resign soon from his Cabinet post apparently disillusioned by the huge restrictions from party members and counterparts in the Opposition on the Centre's disinvestment agenda worsened the sentiment.

Shourie is known to be the most vocal proponent of speedy disinvestment in state-run companies. The resignation rumour was, however, denied by Shourie later today.

In addition, is the rumour that disinvestment in all PSUs will be delayed till March 2003. As a result investors have lost confidence in the government's commitment to its reforms programme, dealers said. Sceptical investors are now offloading stakes in PSUs, dealers added.

On August 31, a high level group of ministers decided to defer the divestment of the government stake in Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) for a period of three months.

The government has also proposed to set a review group for chalking out the modalities of the divestment issues raised by the petroleum ministry regarding the BPCL and HPCL sell-off.