PSU stocks :2024 soar to seven-year high in market-cap constituting 16% of listed universe
While there are some concerns about valuations, the overall sentiment remains positive, driven by strong fundamentals, healthy order books, and improving performance metrics.
The share of public sector companies in India’s total stock market capitalization has soared to a seven-year high of over 16 percent in May, driven by a strong rally in state-owned companies. This surge is a significant rise from the low of 7.8 percent in October 2020, doubling since then, and stands in contrast to the peak of 29 percent in February 2009.
Neeraj Chadawar, Head of Fundamental and Quantitative Research at Axis Securities, highlighted that with more PSU firms listed, including major players like LIC, there’s optimism for further growth with stable political and policy continuity. He noted, “Healthy fundamentals and reduced government intervention have boosted confidence in PSU stocks, leading to positive sentiment and rerating.”
