ManagementGovt's stock mkt kitty zooms by Rs 6.5 lakh cr in 2009
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 Rs 10 crore in every minute of trade in 2009 resulting in a total gain of Rs 6,50,000 crore.
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Riding on the sharp rally in the stock markets during the year just gone-by, when the market gained over 80 per cent, the total value of shares held by either Central or state governments nearly doubled to over Rs 14,00,000 crore at the end of 2009--from about Rs 7,67,000 crore 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 Rs 6,30,000 crore, while the government holdings in the rest of the market appreciated by another Rs 20,000 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 Rs 10 crore per minute.
The Centre"s shareholding in the PSUs range from 51 per cent to over 99 per cent, 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.
The promoters and government were followed by the foreign institutional investors, whose portfolio appreciated by more than Rs 4,00,000 crore to close to Rs 7,90,000 crore. The average shareholding of the FIIs in Indian market currently stands at about 13 per cent.
With their respective average holdings of 4.6 per cent and 3.9 per cent, the insurers and mutual funds saw their holdings growing by Rs 1,40,000 crore and Rs 1,21,000 crore, respectively. At the end of 2009, the total shareholdings of insurers and MFs stood a Rs 2,82,000 crore an Rs 2,37,000 crore, respectively.
Among the institutional investors, the smallest gain went into the kitty of banks and other financial institutions, as their shareholding appreciated by just about Rs 50,000 crore and remained slightly below Rs 1,00,000 crore with an average holding of 1.6 per cent.
Among the retail investors, the smaller investors (those holding shares worth up to Rs 1 lakh in a company) owned shares worth Rs 1,14,000 crore at the end of 2009. With an average shareholding of 1.9 per cent, their portfolio grew by about Rs 59,000 crore.
The bigger retail investors, those holding shares worth over Rs 1 lakh in a company, held total shares worth Rs 4,25,000 crore at the end of 2009. With an average holding of about seven per cent, their shareholding appreciated by about Rs 2,15,000 crore.
Total gains registered by the government-held shares account for over 20 per cent of the total rise of about Rs 30,00,000 crore in overall investor wealth during 2009.
The total investor wealth, measured in terms of cumulative market capitalisation of all listed companies, grew from Rs 31,00,000 crore to over Rs 60,50,000 crore 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 Rs 1,00,000 crore.
Incidentally, NMDC figures among those CPSUs where the government has initiated the process of disinvestment to dilute its holding from 98.38 per cent 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 Rs 81,000 crore), MMTC (Rs 76,000 crore), SAIL (Rs 58,000 crore), NTPC (Rs 40,000 crore), SBI (Rs 37,000 crore) and BHEL (Rs 35,000 crore).
While the government"s shareholding appreciated by over Rs 10,000 crore in a total 14 PSUs, there were just seven companies that saw an appreciation of below Rs 1,000 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.
ONGC is the most-valued PSU with a market capitalisation of over Rs 2,50,000 crore, followed by NTPC (Rs 1,95,000 crore), MMTC, NMDC, SBI, BHEL and SAIL.
Beyond the PSUs too, there were just about half a dozen companies, including Tata Communications, that saw a dip in the value of government holding, resulting in a total decline of less than Rs 2,000 crore.
The overall non-government holding in the listed companies run by the Central or state governments appreciated by about Rs 1,70,000 crore in 2009 -- thus resulting in a total gain of about Rs 8,00,000 crore to the cumulative market capitalisation of these companies.
All these companies put together currently carry a market capitalisation of close to Rs 18,00,000 crore -- up from nearly Rs 9,80,000 crore in 2008.