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Over 3 years, shares of PSUs in overall market cap down by a fourth: Narendra Modi’s stealth privatization
April 24, 2017
- In the three years that Narendra Modi has been in charge, he has effectively privatized a bit more than a fourth of the country’s PSU network, both for banks as well as non-banks.
- In the case of PSU banks, it fell from 54% of the market capitalization of all banks in May 2009 when UPA-2 took charge, to 43% in May 2014 when Modi came in, to 31% today.
- How soon the government will come up with a workable solution to resolving the NPA problem of PSU banks—critical to their valuation rising—is unclear, but the fact that an insolvency code has been legislated means it should be easier to remove defaulter-promoters.
