The NSE Nifty closed above the 14500 mark on Friday last after correcting nearly 3.31% down during the last few trading sessions. Mirroring the positive trend in the global markets, our very own S&P BSE Sensex closed 568 points or up by 1.17% at 49008 levels while the Nifty 50 Index surged 1.27% or 182 points to end the day at 14507 levels. The major stocks which boosted the indices were the HDFC twins—HDFC Ltd up by 2.40% and HDFC Bank up by 1.88%. The other stocks trading in the positive territory were Asian Paints, Hindustan Unilever and ICICI Bank, among others. It was no wonder that the NSE India VIX which is a gauge of the market expectation of volatility also turned soft by over 9% to close at 20.65. With the financial year closing in the next few days and next week to be a truncated week with only three trading sessions, analysts expect the markets to be range bound but with a positive bias. Brokers and analysts are expecting April to be a better month for the stock market than March on the back of the Q4 FY21 earning season kicking in. During the current calendar year, the S&P BSE PSU index has increased by over 20% on the back of government’s renewed disinvestment plans as the recent increase in market prices of PSU stocks reflect the market’s enthusiasm about large value unlocking from their potential privatisation. Analysts report that the government could raise Rs 12 lakh crore if it was to sell its entire holdings in all listed central PSUs at current valuations. After raising Rs 1 lakh crore through the exchange-traded fund route over FY19 and FY20, the government has stopped this selling procedure in FY21, thus reducing the equity supply pressure. The new disinvestment policy which was announced in the Union Budget for FY22 has been set at Rs 1.75 lakh crore shows that the government plans to sell its stake in most of the state-run companies and exit all non-strategic sectors. Moreover, the government’s plan to come up with an Initial Public Offer of insurance giant LIC also has been extremely positive for the stock market. Apart from other PSU stocks there have been media reports that the eight business units of Balmer Lawrie are likely to be sold off as part of the government’s disinvestment programme. The company is a Miniratna under the Ministry of Petroleum and Natural Gas engaged in the following eight business units – lubricant and greases , industrial packaging , travel , leather chemicals , logistics , logistics infrastructure , logistic services and oil and refinery . The government had announced a new public sector policy wherein public sector enterprises which are not deemed to be of strategic importance should be either merged or privatised depending on favourable market conditions. Balmer Lawrie could be the second PSU after Bharat Petroleum to be put up for disinvestment by the government in the fiscal year 2022. There is no doubt that public sector enterprises which go private start performing better on the back of higher efficiency and profitability and increased professionalism. The Balmer Lawrie stock quoting at Rs 126 on the Indian bourses can be accumulated by portfolio investors for a 20% gain in the next six months’ time frame on the back of better valuation disinvestment target.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.