PM Modi says PSUs net worth soared 78% since 2014, cheers rising confidence

Narendra Modi, Prime Minister, India

Prime Minister Narendra Modi on February 7 lauded the increased public confidence in public sector units (PSUs) under the BJP-led NDA government, criticising the erstwhile Congress government for "neglecting" the PSU sector during their tenure.

In his address to the Rajya Sabha during the Motion of Thanks to the President's address, PM Modi highlighted that the net worth of India's PSU companies has surged by 78 percent since 2014, and their shares are now yielding favourable returns.

"The net worth of PSU companies has surpassed Rs 17 lakh crore, compared to Rs 9.5 lakh crore in 2014. Additionally, the number of PSUs has increased from 234 to 254 since 2014," he said.

In the past one year, one out of every three PSU stocks gained at least 100 percent or more, leading to a surge of over 95 percent in the BSE PSU index, as per the data. Further, the BSE PSU index has gained over 169 percent over the past five years.

Last week, Finance Minister Nirmala Sitharaman also highlighted that the government was all in to improve the valuation of PSUs. Government-owned companies have historically traded at discounts to their private peers. However, in the last couple of years, they have closed the gap.

"We are focused on maintaining their valuations," said the finance minister in an exclusive interview with Network18. "If you observe the public sector listed companies and their market valuations today, you can see the enhanced vibrancy. Share prices have risen, and dividends are much improved. So, disinvestment is one aspect, but our aim is to enhance their value and ensure favorable market perception," she added.

Sitharaman also noted that the private sector has been permitted entry into "core strategic" sectors, and the government aims to maintain only a "minimal presence" in these areas.