New Delhi: The Government could be among the least active investors in the stock markets, but it appears to have come out the winner in terms of returns—its equity portfolio appreciated by about Rs10 crore in every minute of trade in 2009 resulting in a total gain of Rs6.5 trillion.
Riding on the sharp rally in the stock markets during the year just gone-by, when the market gained over 80%, the total value of shares held by either Central or state governments nearly doubled to over Rs14 trillionat the end of 2009—from about Rs7.67 trillion a year ago.
This is based on the change in the value of Government’s shareholding in 2009 in about four dozen PSUs, as also about 170 other companies where they hold shares as promoters or non-promoters.
Among these, the PSUs created a cumulative stock market wealth of close to Rs6,30,000 crore, while the government holdings in the rest of the market appreciated by another Rs20,000 crore.
Taking into account a total of about 220 trading days during the year with five-and-a-half hours of trading a day, the average gains registered by the government-owned shares works out to be nearly Rs10 crore per minute.
The Centre’s shareholding in the PSUs range from 51 to over 99%, while there are about 170 other companies that have governments, Central or state, as shareholders. In some companies, these shareholdings are as low as a fraction of a percentage point.
Total gains registered by the government-held shares account for over 20% of the total rise of about Rs30 trillion more in overall investor wealth during 2009.
The total investor wealth, measured in terms of cumulative market capitalisation of all listed companies, grew from Rs31trillion to over Rs60.5 trillion last year.
The biggest wealth-creator for the government in 2009 was NMDC, which is the only company where the government holding appreciated by over Rs1 trillion.
Incidentally, NMDC figures among those CPSUs where the Government has initiated the process of disinvestment to dilute its holding from 98.38% currently. During 2009, the government divested its equity in two companies—NHPC and Oil India-- while others that could see further divestment this year include SAIL, REC and NTPC.
Other major wealth creators for the Government in 2009 include ONGC (over Rs81,000 crore), MMTC (Rs76,000 crore), SAIL (Rs58,000 crore), NTPC (Rs40,000 crore), SBI (Rs37,000 crore) and BHEL (Rs35,000 crore).
While the government’s shareholding appreciated by over Rs10,000 crore in a total 14 PSUs, there were just seven companies that saw an appreciation of below Rs1,000 crore.
State-run telecom major MTNL was the only PSU that saw its market value dipping last year, resulting into a decline of about Rs 188 crore in the value of the government shares.