After adding lakhs of crore to their market value in 2007, the country's government-run firms seem to have started the new year on an inauspicious note with a loss of close to Rs 25,000 crore in just two weeks.
The total wealth of investors in the PSU companies, with the government as major beneficiary, rose by more than Rs 10,00,000 crore (250 billion dollars) during 2007. But barely two weeks into 2008, the companies have lost over two per cent of the total gains recorded in the previous year.
The PSU companies accounted for almost one-third of the gain in the entire stock market valuation of about Rs 35,00,000 crore during 2007. However, the share of these companies is more than two-third in the total loss so far in 2008.
While the market benchmark Sensex has gained close to 540 points since the beginning of 2008, the total market value of all the listed companies has dropped by close to Rs 31,000 crore as a number of non-Sensex companies have seen their market values declining in this period.
The BSE's PSU index, after surging by more than 4,000 points in 2007, has dropped by about 70 points this year.
However, when compared in terms of price-to-earnings ratio, PSU stocks are the second least expensive after auto sector and is much better valued than the Sensex blue-chips.
The PSU index has a P/E ratio of 19.74, higher than only 18.51 for Auto index and compares favourably with 28.44 for Sensex. A lower P/E ratio indicates a better valuation. The realty sector is most expensive with a P/E ratio of 73.99, followed by power segment at 41.75.
The total market value of 45 PSU firms stands at Rs 17,65,538 crore, down from Rs 17,89,673 crore at the end of 2007. Earlier, it had soared by Rs 10,46,000 crore during 2007 from Rs 7,43,723 crore at the end of 2006.