Temper expectations from privatisation trade, say analysts

The brokerage says listed PSUs face several challenges and continued government ownership may weigh on their performance

Shares of several public sector undertakings (PSUs) have rallied following national carrier Air India’s sale to the Tata Group. 

The Street is hopeful that the Centre will privatise more state-owned firms, which will unlock value for all shareholders. However, domestic brokerage Kotak Institutional Equities (KIE) says it is best to temper privatisation hopes. It says the Centre’s policy to retain at least one or two PSUs in “strategic” sectors and the long list of “strategic” sectors will prevent most large PSUs from privatisation.

“The government’s current privatisation policy, which entails a bare minimum presence in certain strategic sectors, may result in the