5 PSU Stocks Which Government of India is Disinvesting in | Government Stocks |Intelligent Investors - YouTube

Hey friends! PSU disinvestment news attracts the interest of a lot of retail investors towards the companies where the government is going to make disinvestments

You must keep yourself regularly updated regarding disinvestment by the government and the eventual benefit to the companies.

This will help you in making an informed decision. You don't have to take action on every news.

You must understand the implications of the disinvestment. Will it be positive for the company?

If yes, then it will be right to take action in its regard.

It is not right to follow any news blindly and then take action.

We will talk about disinvestment in detail.

We will talk about the companies where the government has disinvested in recent times.

We will also discuss the companies where disinvestment is in process and disinvestment has been approved/announced.

We will discuss some companies in detail.

I, Jagdeep Sigh, welcome you to the Groww youtube channel. Let's speedily start today's video.

(before starting the video) If you have not subscribed to Groww's youtube channel then surely do it so that you don't miss any of our important updates.

Without taking much time let's talk about the companies where the government has done disinvestment and where it is in process.

An estimate is made by the Government of India concerning the amount of disinvestment in companies.

This announcement is made in the budget. There are two different amounts- estimate and actual realization.

Assume that the government announces that it is going to sell an x% stake in a company.

The government estimates the amount it will receive if it sells the company on today's valuation.

So there is a difference between the government's estimate and the amount it actually realizes.

Let's see the government's estimates and actual realizations regarding disinvestment every year since 2014.

As you can see on my screen we have displayed the budget estimates, revised estimates, and realizations of past years'

in relation to the disinvestment announced by the government in a company.

In 2014-15 the government placed a disinvestment estimate of Rs.43,425 cr. This number was further revised to Rs.26,353 cr.

The actually realized number was Rs.24,349 cr. Here you can see year-on-year government disinvestment initiatives.

An interesting fact for the year 2017-18 is that the amount in the budget announcement was Rs.72,500 cr,

But this estimate was later revised to Rs.1,00,000 cr. The realized number was even above Rs.1,00,000 cr.

In 2018-19 the budget estimate was Rs.80,000 cr. The actual realization was around Rs.84,972 cr.

In recent times government disinvestment initiatives show that its actual realizations were more than the estimated amount.

Now let's talk about the companies where disinvestment was announced and completed by the government.

As you can see on the screen the name of the companies are visible where disinvestment was announced and completed.

Every government company comes under a Ministry. We have displayed this information for you.

Firstly we will talk about Hindustan Petroleum Corporation Ltd. This is also known by the name of HPCL.

This company comes under the Ministry of Petroleum and Natural Gas. Disinvestment was announced and eventually completed for this company.

The next company is Rural Electrification Corporation Ltd. This company comes under the Ministry of Power.

Disinvestment was announced and eventually completed for this company. Now let's talk about the next company.

It is HAL- Hindustan Aeronautics Ltd. This comes under the Ministry of Defence. In recent times this company's share price also rose.

Disinvestment was completed for this company as well. The last company on the list is SAIL- Steel Authority of India.

This company comes under the Ministry of Steel. Disinvestment was completed for this company as well.

So this was the information regarding the companies where disinvestment was entirely completed (as announced by the government).

Now we will talk about the important part (about the companies if you are interested).

These are the companies where disinvestment was announced and is still in process. It has not been completed till now.

Now let's quickly talk about these companies. Disinvestment is in process for these companies.

We will share some details in this regard so that you get important information (in case you are searching for these companies).

As you can see on my screen there is a list of companies where the disinvestment process is still in progress.

The first company is Scooters India Ltd. that falls under the Department of Heavy Industry.

The second company is known by the name of BEML -Bharat Earth Movers Ltd. It comes under the Department of Defence Production.

First, let's talk about Scooters India Ltd. This is a public sector company.

It manufactures different automobile components and supplies them. Besides this, it also manufactures three-wheelers.

The government is trying (recently) disinvestment and turnaround in this regard. This is the first company where disinvestment is in progress.

Earlier (also) the government tried turnaround and disinvestment in this company.

In the coming time, we will get to know how disinvestment emerges in the near future.

If you are willing to invest in this company as a shareholder then do study it in detail.

This company is a loss-making company from past few years. You should make a decision for investment after proper research.

Now let's talk about BEML. This company manufactures heavy earthmovers equipment.

This is considered a large company in Asia where its products are supplied. An interesting fact is that this company falls under the MiniRatna category.

This company mainly operates in three business verticals. The first is mining.

The second is Defence and Aerospace. The third is Railway and Metro.

These are the company's three business verticals where it runs its operations. Let's talk about the company's international business.

This company's products are supplied to over 65 countries.

From here you can understand that this company's presence in other countries (except India) is quite remarkable.

Let's discuss government ownership. The government has a 54% share in the company.

The government is trying to disinvest its 26% share in the company.

From here you can understand that the portion of disinvestment (that the government wants to do) is quite huge.

This is a Bangalore-based company. Its production plants also operate nearby.

The share price of the company trades around Rs.928. The market capitalization of the company is around Rs.3,800 cr.

In the last one year, this company has delivered a negative 7% to its investors.

While the Return on Equity of this company is also not quite great. Its Return on Equity is around 2%.

Its Debt-equity ratio is 0.15. This company doesn't have much debt.

After discussing the companies where disinvestment is in progress;

Now let's talk about the companies where the government has recently given strategic disinvestment approval.

I will list these companies. As you can see on my screen the first company is BPCL- Bharat Petroleum Corporation Ltd.

It falls under the Ministry of Petroleum and Natural Gas. The government has given approval for strategic disinvestment in recent times

Besides this, the next company is Shipping Corporation of India Ltd. It falls under the Ministry of Shipping.

The last company is Container Corporation of India Ltd. It falls under the Ministry of Railways.

The government has given its strategic disinvestment approval for these three companies. Firstly let's talk about BPCL.

You would be aware of its business model. This company explores oil, refines it, and sells end products (that are petrol driven).

Besides this, it sells petrol and diesel products through outlets.

BPCL has mainly four refineries that operate in Kochi, Assam, Madhya Pradesh, and Mumbai.

A hidden fact about this company is that it has a great business in gas distribution in the cities.

We have not seen any impact on the financials of this company. The share price of BPCL trades around Rs.396.

The market capitalization of this company is above Rs.85,000 cr. The government's stake in this company is around 53%.

This amount is Rs.45,000 cr. The government is planning to disinvest its complete 53% stake in BPCL.

The Return on Equity of BPCL is 12%. In the last one year, this company has delivered a negative 15% return to its investors.

As you know that petrol and diesel prices in India are completely market-driven.

The government had earlier done deregulation in this regard. But if any new private player enters, then its view on disinvestment will be known in the future.

The second important point is that Mumbai and Kochi refineries are more than two decades old.

They are upgraded with new pieces of machinery. But a new player's view on this is also an important point (where you need to focus).

Now let's talk about the second company where the government has announced strategic disinvestment recently.

It is the Shipping Corporation of India. This company was incorporated in 1961.

This company that started with 19 vessels is today India's No.1 shipping company. It owns different vessels.

The share price of the Shipping Corporation of India is Rs.89. This makes its market capitalization of around Rs.3,900 cr.

An interesting fact over here is that the government's stake in this company is 63%.

The government is planning to disinvest its complete stake in the Shipping Corporation of India.

Another interesting fact regarding this company is that it has delivered a positive 37% to its investors in the last one year.

From here you can understand that even in comparison to Nifty this company has performed well as a PSU company.

The P/E ratio of this company is around 4.4. While the industry P/E ratio is around 8.

This company has a low P/E ratio as compared to the industry. This can be a positive point for the investors.

Let me tell you an interesting fact over here.

As per the Ministry of Shipping, 95% of the trading activity (movement of goods from one country to another) in India (by volume) is done through shipping.

This is 70% in value terms. From here you can understand that maritime is quite important in international trade.

This company's positioning becomes quite important over here. Now let's talk about the last company of today's video.

It is the Container Corporation of India. Now let's talk about its business model.

This company's business is spread in three verticals namely Carrier, Terminal operator, and Warehousing. These are its three main business verticals.

Its carrier business is remarkably linked with Railways. Cost through Railways transportation is quite less and scaling is also easier.

Its business related to Carrier is linked well with Railways and Roadways.

The share of Container Corp trades for Rs.420. Its market capitalization is around Rs.45,000 cr.

The government's stake in the market capitalization is around 54%. The government wants to offload 30% of its stake i.e. it is planning to disinvest this stake.

The government has given approval in this regard in recent times.

The P/E ratio of this company is around 35. While the industry P/E ratio is around 22.

As compared to the industry company's P/E ratio is slightly higher. Let's discuss the last one year return of the company.

It has delivered a negative 25% return to its investors. This was our today's video where we discussed disinvestments.

A lot of people get interested in disinvestment news. Here we shared the information that is important for you.

You should clearly bifurcate the entire topic into- Disinvestment completed, Disinvestment in-process and Disinvestment announced.

The market knows about disinvestment as it is announced.

Here I would like to give a suggestion if you are willing to invest in these companies.

Always research well and then invest for the long term (to make good returns). This video is for purely educational purposes.

We don't give any buy/sell recommendations for any stock.

We want to deliver the right information so that you can make an informed decision before investing at any place.

I hope you liked today's video. Do like the video.

Comment below- The name of the public sector company where you are willing to invest. Mention the company from this list.

Also, write down your reasons so that our viewers learn from your comments.

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