SlideShare a Scribd company logo
1 of 1
Download to read offline
PSU IPOs give provide better returns than private peers: Study
New Delhi June 04


With a host of public sector firms waiting to enter the capital market, investors have something to cheer
about as PSUs, which had come out with their initial public offers in the last five years, have given better
returns than their private sector peers, a study says.

The returns provided by PSUs, which came out with IPOs in the last five years 2004-09, have more than
doubled, while their private sector peers gave returns of 3.45 per cent in the same period, according to
data compiled by SMC Capitals. The findings indicate that there exist divergence between the returns of
PSU IPOs and private sector peers, with a positive edge to PSU IPOs.

“People have burnt their fingers with the private sector IPOs in the past. Now they would want to reap
returns and the investor community will invest in the big-ticket upcoming IPOs,” SMC Capitals Equity
Head Jagannadham Thunuguntla said. Pricing of IPOs and strong balance sheet makes PSUs better
placed than their private sector counterparts. The government’s aim to divest stake in major state-run
firms is set to perk up the IPO space, with about six PSUs including Air India, BSNL, Oil India and NHPC,
gearing up to sell equity sale in the primary market, analysts said.

Primary market

“The two IPOs of NHPC and OIL would hold the key to revival of the primary market as foreign investor
community would be looking at how the demand shapes up,” said Thunuguntla. Between 2004-2009,
there was as many as 278 IPOs totaling $25.12 billion, of which 88 are currently trading in profit while the
remaining 190 were in the red. In the past five years, of 13 PSU IPOs launched worth $6.2 billion, 12
were trading in profit. However, of the 265 private sector IPOs totaling $18.92 billion launched, only 76
were in the green.

In 2004, when the UPA government came to power with Left as an ally, it had planned to divest stakes in
the PSU entities like Neyveli Lignite, Coal India and Power Finance Corporation, but that was stalled by
the Leftists allies.

Moreover, with a sharp downslide in the secondary market and a downturn in the global economy, fund
mobilisation by the government by way of IPOs declined in 2008.

There was only one PSU IPO of Rural Electrification Corporation, worth Rs 1,421 crore. In 2007, there
were four PSU IPOs, including those of Power Grid Corp and Power Finance Corp worth Rs 5,580 crore.
Press Trust of India

More Related Content

Viewers also liked

Scientific Issues Concerning Radon in Natural Gas
Scientific Issues Concerning Radon in Natural GasScientific Issues Concerning Radon in Natural Gas
Scientific Issues Concerning Radon in Natural GasMarcellus Drilling News
 
Europe crop protection industry outlook to 2016 sample report
Europe  crop protection industry outlook to 2016 sample reportEurope  crop protection industry outlook to 2016 sample report
Europe crop protection industry outlook to 2016 sample reportAMMindpower
 
Quinnipiac University Poll of New York State - Gas Drilling Questions
Quinnipiac University Poll of New York State - Gas Drilling QuestionsQuinnipiac University Poll of New York State - Gas Drilling Questions
Quinnipiac University Poll of New York State - Gas Drilling QuestionsMarcellus Drilling News
 
Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...
Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...
Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...Jan Fried
 
Study: Evaluation of Methane Sources in Groundwater in Northeastern Pennsylvania
Study: Evaluation of Methane Sources in Groundwater in Northeastern PennsylvaniaStudy: Evaluation of Methane Sources in Groundwater in Northeastern Pennsylvania
Study: Evaluation of Methane Sources in Groundwater in Northeastern PennsylvaniaMarcellus Drilling News
 
Atensi­ Rkakl 2010
Atensi­ Rkakl 2010Atensi­ Rkakl 2010
Atensi­ Rkakl 2010RENBANG
 
Quadro_Sub10_Fem
Quadro_Sub10_FemQuadro_Sub10_Fem
Quadro_Sub10_FemCTSA
 
PA House Bill 2508 Providing for a New Shale Drilling Severance Tax
PA House Bill 2508 Providing for a New Shale Drilling Severance TaxPA House Bill 2508 Providing for a New Shale Drilling Severance Tax
PA House Bill 2508 Providing for a New Shale Drilling Severance TaxMarcellus Drilling News
 
Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...
Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...
Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...AMMindpower
 
GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...
GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...
GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...Marcellus Drilling News
 
Ma. theresa a. miranda treasured moments at holy gardens oton memorial park
Ma. theresa a. miranda treasured moments at holy gardens oton memorial parkMa. theresa a. miranda treasured moments at holy gardens oton memorial park
Ma. theresa a. miranda treasured moments at holy gardens oton memorial parkHoly Gardens Oton
 

Viewers also liked (12)

070709 Sb
070709 Sb070709 Sb
070709 Sb
 
Scientific Issues Concerning Radon in Natural Gas
Scientific Issues Concerning Radon in Natural GasScientific Issues Concerning Radon in Natural Gas
Scientific Issues Concerning Radon in Natural Gas
 
Europe crop protection industry outlook to 2016 sample report
Europe  crop protection industry outlook to 2016 sample reportEurope  crop protection industry outlook to 2016 sample report
Europe crop protection industry outlook to 2016 sample report
 
Quinnipiac University Poll of New York State - Gas Drilling Questions
Quinnipiac University Poll of New York State - Gas Drilling QuestionsQuinnipiac University Poll of New York State - Gas Drilling Questions
Quinnipiac University Poll of New York State - Gas Drilling Questions
 
Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...
Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...
Investment Priorities of the Czech Republic - CzechInvest (2012-02-14) Los An...
 
Study: Evaluation of Methane Sources in Groundwater in Northeastern Pennsylvania
Study: Evaluation of Methane Sources in Groundwater in Northeastern PennsylvaniaStudy: Evaluation of Methane Sources in Groundwater in Northeastern Pennsylvania
Study: Evaluation of Methane Sources in Groundwater in Northeastern Pennsylvania
 
Atensi­ Rkakl 2010
Atensi­ Rkakl 2010Atensi­ Rkakl 2010
Atensi­ Rkakl 2010
 
Quadro_Sub10_Fem
Quadro_Sub10_FemQuadro_Sub10_Fem
Quadro_Sub10_Fem
 
PA House Bill 2508 Providing for a New Shale Drilling Severance Tax
PA House Bill 2508 Providing for a New Shale Drilling Severance TaxPA House Bill 2508 Providing for a New Shale Drilling Severance Tax
PA House Bill 2508 Providing for a New Shale Drilling Severance Tax
 
Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...
Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...
Asia Gems and jewelry industry is poised to cross the USD 100 billion benchma...
 
GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...
GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...
GAO Report - Drinking Water: Characterization of Injected Fluids Associated w...
 
Ma. theresa a. miranda treasured moments at holy gardens oton memorial park
Ma. theresa a. miranda treasured moments at holy gardens oton memorial parkMa. theresa a. miranda treasured moments at holy gardens oton memorial park
Ma. theresa a. miranda treasured moments at holy gardens oton memorial park
 

More from Jagannadham Thunuguntla

Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013Jagannadham Thunuguntla
 
Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013Jagannadham Thunuguntla
 

More from Jagannadham Thunuguntla (20)

Financial chronicle 10.05.2014
Financial chronicle 10.05.2014Financial chronicle 10.05.2014
Financial chronicle 10.05.2014
 
The indian express
The indian expressThe indian express
The indian express
 
The financial express
The financial expressThe financial express
The financial express
 
The hindu business line
The hindu business lineThe hindu business line
The hindu business line
 
The asian age
The asian ageThe asian age
The asian age
 
Economic times 28.03.14.
Economic times   28.03.14.Economic times   28.03.14.
Economic times 28.03.14.
 
Economic times 26.03.14.
Economic times   26.03.14.Economic times   26.03.14.
Economic times 26.03.14.
 
Economic times 25.03.14.
Economic times   25.03.14.Economic times   25.03.14.
Economic times 25.03.14.
 
Financial chronicle 03.02.2014
Financial chronicle   03.02.2014Financial chronicle   03.02.2014
Financial chronicle 03.02.2014
 
Business standards 03.02.2014
Business standards   03.02.2014Business standards   03.02.2014
Business standards 03.02.2014
 
Financial chronicle - 31.01.201
Financial chronicle - 31.01.201Financial chronicle - 31.01.201
Financial chronicle - 31.01.201
 
The financial express 07.01.14.
The financial express   07.01.14.The financial express   07.01.14.
The financial express 07.01.14.
 
The business standard 07.01.14.
The business standard   07.01.14.The business standard   07.01.14.
The business standard 07.01.14.
 
Financial chronicle 7.01.14.
Financial chronicle   7.01.14.Financial chronicle   7.01.14.
Financial chronicle 7.01.14.
 
Business Standard 24.12.13
Business Standard 24.12.13Business Standard 24.12.13
Business Standard 24.12.13
 
The Hindu business
The Hindu businessThe Hindu business
The Hindu business
 
Hindu 17.12.13
Hindu 17.12.13Hindu 17.12.13
Hindu 17.12.13
 
Hindu 17.12.2013
Hindu 17.12.2013Hindu 17.12.2013
Hindu 17.12.2013
 
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
 
Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013
 

Recently uploaded

Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent PreferencesGRAPE
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxPrecize Formely Leadoff
 
Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfMichael Silva
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Commonwealth
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024Neil Day
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...Antonis Zairis
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Guillaume Ⓥ Sarlat
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingHenry Tapper
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.KumarJayaraman3
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneurabcisahunter
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTindexPub
 
LIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptxLIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptxsonamyadav7097
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklosbeduinpower135
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismBrian Lin
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources PresentationAdnet Communications
 

Recently uploaded (20)

Contracts with Interdependent Preferences
Contracts with Interdependent PreferencesContracts with Interdependent Preferences
Contracts with Interdependent Preferences
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptx
 
Stock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdfStock Market Brief Deck for March 26.pdf
Stock Market Brief Deck for March 26.pdf
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024
 
Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB funding
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
 
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
 
Commercial Bank Economic Capsule - March 2024
Commercial Bank Economic Capsule - March 2024Commercial Bank Economic Capsule - March 2024
Commercial Bank Economic Capsule - March 2024
 
LIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptxLIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptx
 
Digital Financial Services Taxation in Africa
Digital Financial Services Taxation in AfricaDigital Financial Services Taxation in Africa
Digital Financial Services Taxation in Africa
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklos
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation
 

Zee News Jun 5, 2009 PSU IPOs Give More Returns Than Private Cos

  • 1. PSU IPOs give provide better returns than private peers: Study New Delhi June 04 With a host of public sector firms waiting to enter the capital market, investors have something to cheer about as PSUs, which had come out with their initial public offers in the last five years, have given better returns than their private sector peers, a study says. The returns provided by PSUs, which came out with IPOs in the last five years 2004-09, have more than doubled, while their private sector peers gave returns of 3.45 per cent in the same period, according to data compiled by SMC Capitals. The findings indicate that there exist divergence between the returns of PSU IPOs and private sector peers, with a positive edge to PSU IPOs. “People have burnt their fingers with the private sector IPOs in the past. Now they would want to reap returns and the investor community will invest in the big-ticket upcoming IPOs,” SMC Capitals Equity Head Jagannadham Thunuguntla said. Pricing of IPOs and strong balance sheet makes PSUs better placed than their private sector counterparts. The government’s aim to divest stake in major state-run firms is set to perk up the IPO space, with about six PSUs including Air India, BSNL, Oil India and NHPC, gearing up to sell equity sale in the primary market, analysts said. Primary market “The two IPOs of NHPC and OIL would hold the key to revival of the primary market as foreign investor community would be looking at how the demand shapes up,” said Thunuguntla. Between 2004-2009, there was as many as 278 IPOs totaling $25.12 billion, of which 88 are currently trading in profit while the remaining 190 were in the red. In the past five years, of 13 PSU IPOs launched worth $6.2 billion, 12 were trading in profit. However, of the 265 private sector IPOs totaling $18.92 billion launched, only 76 were in the green. In 2004, when the UPA government came to power with Left as an ally, it had planned to divest stakes in the PSU entities like Neyveli Lignite, Coal India and Power Finance Corporation, but that was stalled by the Leftists allies. Moreover, with a sharp downslide in the secondary market and a downturn in the global economy, fund mobilisation by the government by way of IPOs declined in 2008. There was only one PSU IPO of Rural Electrification Corporation, worth Rs 1,421 crore. In 2007, there were four PSU IPOs, including those of Power Grid Corp and Power Finance Corp worth Rs 5,580 crore. Press Trust of India