PSU stocks gain on divestments hopes

The PSU stocks were buzzing in trade anticipating stake sales by the government to be speeded up further post BEML receiving in principal approval from the government for stake sale.

The Modi government has been trying to trim down its shareholding in several of the PSUs, including the financially sound ones, along with the ones which have been bleeding financially for a long time and have been a drain on government's resources.

The government’s disinvestment programme is mainly about revenue generation in order to meet its varied developmental agendas, and at the same time, it is about giving operational autonomy to the state firms.

The Indian government has budgeted to make Rs 56,500 crore from disinvestment, including Rs 20,500 crore from strategic sales, by March 2017. The cabinet has already given in-principle approval for divestment of several companies.

However, companies such as Hindustan Zinc and BALCO where the government holds minority stake and have already been privatised, need to be looked at.

MTNL was trading up with the gains of 5 per cent reacting to the government’s divestment drive. MMTC (up 8.2 per cent), Hind Copper (up 3.7 per cent) and Bharat Electronics (up 3.5 per cent) were the other PSU stocks buzzing on D-Street.