21 Feb , 2024 By : Debdeep Gupta
GQG Partners Rajiv Jain is bullish on PSU stocks regrets not buying LIC in 2023
Jain remains optimistic about the State Bank of India and NTPC. GQG Partners holds stakes in both companies
Investment firm GQG Partners’ founder Rajiv Jain thinks PSU stocks are an attractive investment due to improved management and strong long-term growth prospects.
The performance of PSU stocks has been creating a buzz, as the scrips often derisively referred to as wealth destructors generate rich returns for investors. The BSE PSU index has surged over 21 percent, so far this year, against a mere 1 percent rise in the benchmark Sensex.
Jain, who surprised the market by picking stakes in the Adani group of companies when they were hammered in the aftermath of the Hindenburg Research report, regrets not buying shares of the state-run Life Insurance Corporation (LIC) in early 2023 due to limited liquidity.
"We would have loved to buy LIC early last year, but we could not find any blocks," he said in an exclusive conversation with CNBC-TV18.
LIC is among several PSU companies with low public float. The government maintains a 96.5 percent stake in the insurance behemoth, having divested only 3.5 percent equity in India's largest IPO to date.
GQG Partners holds positions in India's largest lender, State Bank of India (SBI), and power utility NTPC and remains optimistic about their long-term prospects.
"In the case of NTPC, the current management is doing a better job compared to the past as many competent people have been hired. Moreover, the performance has improved as they get less intervention from Delhi, which was a chronic problem earlier," he added.
Mutual funds (MFs), too, raised stakes in PSU firms to a record high of 7.58 percent of total assets under management in January, up from 5.72 percent from a year-ago period and 7.24 percent from the previous month.
The market value of MF holdings in PSUs has also seen a significant rise, surpassing Rs 4 lakh crore in January from Rs 2.33 lakh crore a year ago and Rs 3.7 lakh crore last month.
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