Divestment news lose sting on Dalal Street

Gone are the days when the stock markets would dance to the disinvestment tune. With market flush with funds and corporate earnings growing steadily, market players seem to be least worried about the direction of disinvestment, even less about the mode of disinvestment.

The Centre calling off its plan to sell stake in 13 public sector companies to strategic investors has not affected the market sentiment or the specific stocks. The Sensex also remained in the positive territory, though it gained only 0.75 points to 7768.24 points on Monday.

Though disinvestment was a big obsession in the past, with other pillars holding the Sensex up, it seems to be less of a worry these days, a broker said.

"Frequent announcements regarding pro and anti-divestment of central PSUs have taken the sting out of such announcements. Stocks of several companies for which divestment plans were withdrawn have rebounded instead of losing ground," a dealer said on Tuesday.

After closing the week at 4685.95, down 0.8 per cent, the BSE PSU index gained 0.90 per cent on Monday.

There has been several occasions when the stocks have danced to the tunes of announcements made by the central ministers on divestment or otherwise in several companies. HPCL and BPCL divestment plans have remained in a limbo since 2003.

All the top listed companies such as Nalco, HPCL, Engineers India, Shipping Corporation, National Fertilisers and Rashtriya Chemicals and Fertilisers posted gains today even as Union minister of state for finance SS Palanimanickam made the announcement in the Rajya Sabha yesterday.

According to the government reply to a written question, the companies that have been taken off the disinvestment list include National Aluminium Company, Shipping Corporation, National Fertilisers, Hindustan Petroleum Corporation and Engineers India.

Balmer Lawrie, Hindustan Paper Corporation, State Trading Corporation, National Building Construction Corporation, Engineering Projects India, Sponge Iron India, Manganese Ore India and Rashtriya Chemicals and Fertilisers are the other firms which will not be privatised.

Besides these, sale of Bharat Heavy Electricals and the residual stake in Maruti Udyog have been hanging fire for several months. While the present announcement has put the divestment plans to rest, the Maruti Udyog stock was the only one to post losses, in which government has only a small holding. The Maruti stock has come down from Rs 475.75 on last Friday to Rs 472.79 on Monday.