PSU stocks still on shaky ground as call for privatisation intensifies

In the past decade, total market cap of top 17 PSUs has dropped 41% vis-a-vis a 91% rise in Sensex

Skirmishes at the border between India and China have put the spotlight on state-owned firms. This is because many business leaders have asked for the privatisation of behemoths like BHEL and BEML to enable India Inc to compete with Chinese firms in the capital goods space.

The call for privatisation has, however, come at a time when PSU firms have witnessed a sharp drop in their stocks and market capitalisation, and continue to underperform the broader market. In the last 10 years, the combined m-cap of the top 17 PSUs that were part of the BSE200 index (excluding banks and