FPIs: FPIs increase their holdings in 30 of the 50 listed PSUs

Mumbai: Offshore fund managers have reset their faith in public sector companies after a hiatus. Even as they withdrew 2.27 lakhs from Indian shares so far this year, 30 out of 50 retail-listed state-owned companies have seen their foreign ownership rate increase during the period. These include three companies owned by Gujarat government.

Foreign portfolio investors’ (FPIs) share In

increased from 13.30% to 16.71% in the January-June period, while their shares increased from 3.15% to 5.56%. In India Oil, FPI increased their ownership from 10.11% to 12.42%. Similarly, these the investors increased their shares in RCF,,, Bharat Dynamics and Mazagon Dock, among others.

When smart money chases value stocks, PSU has managed to attract some of these flows due to its good balance sheet, higher dividends, lower valuation and strong business outlook.

FPIs Elevate their recovery in 30 out of 50 listed PSUs

“Fund managers globally have shifted their strategies from growth to value stocks,” said Amisha Vora, MD, Prabhudas Lilladher. “Most monopolistically enjoyed PSUs are priced at low PE multiples and have defensive business models with attractive dividend yields. This has driven FPI holdings up.”

Some PSUs in which FPI has increased its stake, such as National Aluminum,

, and, are currently trading with a dividend yield of 5% to 11%, while the majority of them, including, National Aluminum, Oil India, RCF, Chennai Petro, etc are trading at a Price to ratio ratio. Earnings (PE) less than 10 times. Nifty is trading at a PE ratio of 20.11x.

“Many PSU shares are still available very cheaply especially when one focuses on the various reforms promoted by the Modi government over the past eight years such as asset monetization, Make-In-India, strengthening PSU banks’ balance sheets, Jandhan yojana, increased government spending, etc. All these reforms are helping PSU’s valuation and growth,” said Vishal Vasant Wagh, research lead, Bonanza Portfolio know.

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