Mcap of 81 PSUs soared 225% in 3-yr span, HAL valuation up 1,370% in 4-yr: FM Sitharaman

Union Finance Minister Nirmala Sitharaman on Wednesday said that the total market capitalisation of all 81 public sector undertakings (PSUs), including 62 central public sector enterprises (CPSEs), 12 public sector banks (PSBs), three public sector insurance companies (PSICs) and IDBI bank, zoomed 225% in last three years.

Taking to X (formerly Twitter), Sitharaman said that NIFTY CPSE gave returns of 78.8% in the last 36 months, which significantly outperformed NIFTY 500 (27.4%) and NIFTY 50 (22.5%).

The market cap of 12 listed PSBs surged 2.95 times or 195% from ₹5.45 lakh crore on March 31, 2021, to ₹16.12 lakh crore on March 31, 2024, she said.

"Notably, 15 CPSEs have experienced an impressive CAGR ranging from 76% to 100%, reflecting substantial value appreciation and investor confidence. Additionally, 25 CPSEs have demonstrated strong growth with CAGR ranging between 51% to 75%, while 28 CPSEs have shown steady expansion within the range of 26% to 50%," the finance minister added.

HAL valuation jumped 1,370% in four years

The Union minister said that Hindustan Aeronautics Limited's (HAL) valuation skyrocketed by 1,370% in just four years from ₹17,398 crore in 2020 to ₹2.5 lakh crore as of May 7, 2024.

"HAL on 31st March 2024 announced its highest-ever revenue of more than ₹29,810 crore for FY 2023-24 and has a robust order book of over ₹94,000 crore," she said.

Furthermore, Sitharaman said that increased spending in the defence sector and the aim to make it self-reliant has fuelled the growth of PSUs like Bharat Electronics Ltd (BEL), HAL and Mazagon Dock.

How disinvestments helped PSUs, FM Sitharaman explains

She said that disinvestments have not only improved operations but also benefited employees.

Giving an example of Air India, the finance minister said, "It was a pre-condition of the govt to the buyer that there would be NO removal or retrenchment of employees for a period of 1 year. Also, even after one year, there will be a voluntary retirement offer before retrenchment on terms no less favourable than maximum benefits. PF and gratuity benefits were also offered as per laws."

She added, "After a transparent disinvestment, there has been a notable improvement in operations. Air India has seen significant growth in employment opportunities, with over 7500 NEW employees (both flying and ground staff) having joined the company since privatisation. So, far from losing jobs, thousands have joined the company."

Neelachal Ispat Nigam Ltd

"A similar turnaround has happened in NINL (Neelachal Ispat Nigam Ltd) post-privatisation. There has been a perceptible turnaround in the operations of the plant. The plant started operations within three months of acquisition after October 2022," Sitharaman said.

With disinvestment, the unpaid employee dues of ₹387.08 crore were also cleared, she said.