Mumbai: The historic welcome rally in stock markets after the Congress-led UPA got a clear mandate in elections seems to have most benefitted the government itself as the value of its stock portfolio zoomed by about Rs2,50,000 crore in just five trading sessions after the poll results were out.
With such a massive gain in the value of shares held by it in the listed companies, the government has cornered nearly one-third of the overall surge of about Rs7,50,000 crore in the market since the general elections results were declared on 16 May which gave a clear mandate to Manmohan Singh and his team to form the government for second consecutive term.
As the markets were closed on 16 May and the next two days were weekend holidays, there have been only five trading sessions -- from 18 May to 22 May -- since the results were declared.
This five-day gain of about Rs2,50,000 crore in the government’s stock portfolio is equivalent to nearly half of the total gain witnessed during the five years of the first term of the UPA government, beginning May 2004.
The government’s shareholding across all the listed companies is at present valued at about Rs11,30,000 crore.
This includes about Rs11,15,000 crore from the public sector firms in which government holds promoter stake, while another Rs15,000 crore comes from companies in which it has non-promoter holding, such as Hindustan Zinc and IDFC.
While the government owns equity as promoter in more than 80 companies, there are more than 100 other companies in which the government holds shares but as non-promoter shareholders.
A vast majority of shares, in terms of their value, are held by the central government, while various state governments also own shares in many companies.
Before the results of the recent Lok Sabha elections were announced on 16 May, the value of the government’s holding stood at about Rs8,80,000 crore.
The market value of the government’s stock holding stood at about Rs3,00,000 crore when the UPA government first assumed office in May 2004, while it appreciated by over Rs5,00,000 crore during its first five-year term.
Together, the market value of government’s stock holding has appreciated by about Rs8,00,000 crore ever since a UPA government assumed office five years ago, despite a sharp initial plunge seen in the market in May 2004 on the news of the government was formed with the support of Left Parties.
However, the market later saw a sharp bull rally, which continued untill a severe meltdown, due to the global economic downturn, hit the domestic bourses in January 2008.
In the run-up to the results of the latest general elections, the market started moving upward again and a historic rally was witnessed on 18 May when it became clear that the Congress-led UPA would form a stable government without the support of Left parties.
Since 18 May, the total market capitalisation of all the listed companies has grown to about Rs45,60,000 crore -- marking a gain of about Rs7,50,000 crore in just five trading sessions so far.
This includes a gain of over Rs3,00,000 crore in the market value of the public sector companies alone, where the government holds promoter stake.
With an average holding of more than 50% in these companies, the government holds a lion’s share in these firms, whose market capitalisation grew from about Rs11,25,000 crore to over Rs14,25,000 crore during the past five sessions.
The companies having registered significant gains during this period in their market cap include MMTC, ONGC, NMDC, SBI, NTPC, SAIL, BHEL, Indian Oil, Power Grid, Neyveli Lignite, Nalco and Hindustan Copper.
Energy giant ONGC is the most valued PSU firm in the country with a market cap of about Rs2,24,000 crore, which includes shares worth over Rs1,65,000 crore held by the government. Besides, the government’s holding also exceeds Rs1,00,000 crore in companies like NTPC, MMTC and NMDC.
The companies where the government holding is in excess of Rs50,000 crore include BHEL, SBI, SAIL and Indian Oil Corp.