#A3RT ``Trust & Trade``

The sharp fall in #PSUstocks has caused significant wealth erosion for investors across the board, but especially for the Government of India, which is looking to improve valuations of state-run enterprises, going into an ambitious disinvestment drive.

The government holdings in PSU stocks, ranging from 30-90 percent, have shrunk by around Rs 3.79 lakh crore in the last three sessions. While institutional investors lost around Rs 93,590 crore, non-institutional investors saw market cap erosion of about Rs 45,300 crore; and individual holders (with combined holdings of both up to Rs 1 lakh and exceeding Rs 1 lakh) saw their wealth decline by about Rs 36,440 crore in the last three sessions.

On February 7, Prime Minister Narendra Modi praised the growing public confidence in public sector units (PSUs) under the BJP-led NDA government. In his Rajya Sabha address for the Motion of Thanks to the President's speech, PM Modi highlighted a 78% increase in the net worth of India's PSU companies since 2014, now exceeding Rs 17 lakh crore compared to Rs 9.5 lakh crore in 2014. He also noted a rise in the number of PSUs from 234 to 254 since 2014, with their shares yielding favorable returns.

Finance Minister Nirmala Sitharaman also recently emphasized the government's commitment to boost the valuation of PSUs, historically traded at discounts to private counterparts. In an interview with Network18, Sitharaman highlighted improved market vibrancy, rising share prices, and enhanced dividends for public sector listed companies. She stressed the goal is not just disinvestment but to increase their value and ensure a positive market perception. Sitharaman also mentioned allowing private sector entry into "core strategic" sectors, with the government aiming for only a "minimal presence" in these areas.

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