Religare PSU Equity Fund – an open ended PSU Sector scheme shortly. The Scheme Information Document has been filed with SEBI and the approval for the same is awaited. A brief note explaining the case for investing in PSU companies is attached herewith for your reference and feedback. The note covers the following:
- Sectoral Composition of BSE PSU index
- Debt equity Ratio
- Valuations
- Performance of PSU companies
- Disinvestment benefit
- Dividends
Proposed Objective of the fund
The objective of the fund shall be to generate capital appreciation by investing in equity and equity related instruments of companies in which the Central Government or one or more state government or Central Government along with one or more state government exercise management control or has powers to appoint majority of directors.
Suitability
The fund is suitable for investors looking for opportunity to own performing Public Sector Giants and are looking forward to benefiting from long term value unlocking in Public Sector Enterprises.
Benchmark Index
BSE PSU Index
Those who wants to benefit from the PSU growth and divestment plan planned by government can invest in this fund.
Comment by Mahesh Thaiman — October 17, 2009 @ 8:46 am
Valuation wise PSU Companies are available at a discount of approx 25% to Sensex, giving adequate comfort in terms of safety.
Govt’s disinvestment programme will be a good booster for PSU companies. The disinvestment will also improve the free float which will in turn improve their weightage in Nifty, forcing Funds across the World with India exposure to increase exposure to PSUs and giving their Stocks a boost.
Lesser Govt intervention is helping manage the PSUs more professionally thus attacting more FII interest.
All these measure are expected to re-rate PSUs on par with Private Companies in terms of PE, if not more thus giving Above Average Gains.
Comment by Srikanth Matrubai — December 7, 2009 @ 10:08 pm