In a surprising turn of events, public sector undertakings (PSUs) have faced substantial sell-offs over the past two consecutive sessions, resulting in a considerable decline in the prices of these once-galloping stocks. Analysts anticipate further downward trends, attributing the decline to disappointing third-quarter results, as reported by the Economic Times.
On Monday, February 12, both Nifty and Sensex experienced declines of -166.45 and -523.00 points, respectively. The Nifty PSU bank saw a significant drop of -307.90 points (-4.43%), closing at 6,637.05 points. This persistent decline over two days led to a staggering erosion of Rs 4.07 lakh crore in the total market capitalisation of all state-owned companies, bringing it down to Rs 50.21 lakh crore.
Despite the current slump, the Economic Times report suggests that the further downfall could present a lucrative buying opportunity for investors eyeing PSU stocks.
On February 12, shares of Indian Railway Finance Corp Ltd plummeted by 13.21%, closing at Rs 133.40 per share on BSE. Similarly, Rail Vikas Nigam Ltd witnessed a drop of 11.28%, closing at Rs 29.25 lower at Rs 230 during the market closing.
Why is it happening?
The Economic Times report attributes the decline in PSU stocks to a market correction, suggesting that the slump might persist for up to two months, with an anticipated correction of 10-15% in the near future.
The Nifty PSE index recorded a drop of -349.15 points (-3.81%), closing at 8,820.90 points. Major PSU losers included OIL, SAIL, RECLTD, LICI, and NMDC. Shares of OIL, SAIL, LICI, and NMDC witnessed declines of -9.13%, -7.63%, -5.26%, and -4.95%, respectively.
