Skip to main content

Investor confidence in Gujarat falls: State supported cos' stocks decline by 33%

A mine owned by GMDC
By Our Representative
Latest market indications suggest a sharp decline in the level of industry confidence in the Anandiben Patel government of Gujarat, in power for the last one year since Narendra Modi left to as the Prime Minister of India. Sharp loss of the value of stocks by up to 33 per cent of five top state-run public sector undertakings (PSUs) is being cited as a glaring example of this.
According to analysts, quoted a by a leading business daily, the state's listed PSUs had become "popular" destination of investors till Modi was Gujarat chief minister. However, things appear to be looking differently now.
Comparative figures show that between May 2014 and May 2015, the shares of the Gujarat Mineral Development Corporation (GMDC) went down by 33 per cent, while they surged by a whopping 62 per cent in the previous eight months (between September 2013 and May 2014). Headquartered in Ahmedabad, GMDC is involved in mining activities not just in Gujarat but across the country, sub-leasing mines to contractors.
Similarly, the share prices of the Gujarat Narmada Valley Fertilizers and Chemicals (GNFC), Bharuch, which operates from Bharuch, went down by 33 per cent over the last one year. In the previous eight months, its share prices rose by 55 per cent. Involved in producing chemical fertilizers, it set up Gujarat Green Revolution Company for promoting drip and sprinkler irrigation facilities across India.
Then, the Gujarat Alkalies and Chemicals Ltd (GACL), Vadodara, saw a fall in the share price between May 2014 and May 2015 by 18 per cent, when it rose by about 43 per cent in the previous eight months. The GACL's share had surged under Modi though, as premier producer of several rare industrial chemicals, it controversially tied up in 2008 with Dow Chemicals, which had bought up Union Carbide, notoriously involved in Bhopal gas tragedy. Following uproar, the Rs 600 crore deal was cancelled in 2012.
Further, Gujarat Industrial Power Corporation Ltd's (GIPCL's) shares fell over the last one year by 5 per cent, even though they rose by 48 per cent in the eight months prior to that. And, Gujarat State Fertilizer Company's (GSFC's) share prices  fell but one per cent, though they surged by 43 per cent between September 2013 and May 2014. 
The stagnation of the share prices of GSFC is significant, as it took place after the huge surged  despite it came under heavy criticism for allegedly failing to transfer fertilzer subsidy to the farmers to the tune of Rs 460 crore, given by Government of India (click HERE to read).
What is most interesting is that the shares of a "non-existence" state PSU, Gujarat State Finance Corporation (GSFC), rose by a whopping 188 per cent between September 2013 and 2014 under Modi, even though they fell by 45 per cent over the last one year, from May 2014 and May 2015.
GSFC, set up by the Gujarat government during the license permit raj, prior to the new economic policy of 1991, has failed to recover huge dues from small entrepreneurs, which remains its only job as of today. It has stopped providing finances at subsidized rate, as it used to earlier.
Significantly, the shares of these PSUs fell despite the fact that during the last one year the sensex on an average rose by about 13 per cent and 25 per cent in the previous eight month, for which the analysis has been made.
Meanwhile, taking note of the trend, the business daily quotes Gujarat businessmen as saying that it was "reflective of the declining confidence of industry in the new administration, with some of them suggesting that their earlier optimism may have been unrealistic."
The only listed state PSU whose shares surged over the last one year is Gujarat State Petronet Ltd (GSPL), which was set up by the Gujarat State Petroleum Corporation (GSPC) for supplying gas by setting up a pipeline grid, even as taking contracts for laying down cross country gas pipelines. Its share price rose by 57 per cent in the last one year, and  by 51 per cent in the earlier eight months.

Comments

TRENDING

Hindutva founders 'borrowed' Nazi, fascist idea of one flag, one leader, one ideology

By Shamsul Islam*
With the unleashing of the reign of terror by the RSS/BJP rulers against working-class, peasant organizations, women organizations, student movements, intellectuals, writers, poets and progressive social/political activists, India also witnessed a series of resistance programmes organized by the pro-people cultural organizations in different parts of the country. My address in some of these programmes is reproduced here... 
***  Before sharing my views on the tasks of artists-writers-intellectuals in the times of fascism, let me briefly define fascism and how it is different from totalitarianism. Totalitarianism is political concept, a dictatorship of an individual, family or group which prohibits opposition in any form, and exercises an extremely high degree of control over public and private life. It is also described as authoritarianism.
Whereas fascism, while retaining all these repressive characteristics, also believes in god-ordained superiority of race, cultur…

Gujarat refusal to observe Maulana Azad's birthday as Education Day 'discriminatory'

By Our Representative
The Gujarat government decision not to celebrate the National Education Day on !monday has gone controversial. Civil society organizations have particularly wondered whether the state government is shying away from the occasion, especially against the backdrop of "deteriorating" level of education in Gujarat.

Congress 'promises' cancellation of Adani power project: Jharkhand elections

Counterview Desk
Pointing out that people's issues take a backseat in Jharkhand's 2019 assembly elections, the state's civil rights organization, the Jharkhand Janadhikar Mahasabha, a coalition of activists and people’s organisations, has said that political parties have largely ignored in their electoral manifestos the need to implement the fifth schedule of the Constitution in a predominantly tribal district.

Banned? Indian ports 'received' 38 US plastic waste containers reexported from Indonesia

By Rajiv Shah
An Indonesia-based international environmental watchdog group has dug out what it has called “a global pollution shell game”, stating how officials in Indonesia approved re-exports of “illegal” US waste shipments containing plastics mainly to India, as also to other Asian countries -- Thailand, South Korea and Vietnam -- instead of returning them to the US “as promised.”

Ex-World Bank chief economist doubts spurt in India's ease of doing business rank

By Rajiv Shah
This is in continuation of my previous blog where I had quoted from a commentary which top economist Prof Kaushik Basu had written in the New York Times (NYT) a little less than a month ago, on November 6, to be exact. He recalled this article through a tweet on November 29, soon after it was made known that India's growth rate had slumped (officially!) to 4.5%.

With RSS around, does India need foreign enemy to undo its democratic-secular fabric?

By Shamsul Islam*
Many well-meaning liberal and secular political analysts are highly perturbed by sectarian policy decisions of RSS/BJP rulers led by Prime Minister Narendra Modi, especially after starting his second inning. They are vocal in red-flagging lynching incidents, policies of the Modi government on Kashmir, the National Register of Citizens (NRC), the demand for 'Bharat Ratna' to Savarkar who submitted 6-7 mercy petitions to the British masters (getting remission of 40 years out of 50 years' sentence), and the murder of constitutional norms in Goa, Karnataka and now in Maharashtra.

Rushdie, Pamuk, 260 writers tell Modi: Aatish episode casts chill on public discourse

Counterview Desk
As many as 260 writers, journalists, artists, academics and activists across the world, including Salman Rushdie, British Indian novelist, Orhan Pamuk, Turkish novelist and recipient of the 2006 Nobel Prize in literature, and Margaret Atwood, Canadian poet and novelist, have called upon Prime Minister Narendra Modi to review the decision to strip British Indian writer Aatish Taseer of his overseas Indian citizenship.

Worrying signs in BJP: Modi, Shah begin 'cold-shouldering' Gujarat CM, party chief

By RK Misra*
The political developments in neighbouring Maharashtra where a Shiv Sena-NCP-Congress government assumed office has had a trickle down effect in Gujarat with both the ruling BJP and the Congress opposition going into revamp mode.

Church in India 'seems to have lost' moral compass of unequivocal support to the poor

By Fr Cedric Prakash SJ*
In 2017, Pope Francis dedicated a special day, to be observed by the Universal Church, every year, as the ‘World Day of the Poor’. This year it will be observed on November 17 on the theme ‘The hope of the poor shall not perish for ever’; in a message for the day Pope Francis says:

'Discussed' with Modi, Gujarat Rann Sarovar proposal for Kutch runs into rough weather

By Rajiv Shah
Top Saurashtra industrialist Jaysukhbhai Patel’s by now controversial proposal to convert the 4,900 sq km Little Rann of Kutch area, an eco-sensitive zone – a UNESCO biosphere, world’s only wild ass reserve, and a nesting ground of lesser flamingoes – into a huge sweet water lake, called Rann Sarovar, has suffered a major roadblock. At least three Central agencies have expressed serious doubts about its feasibility.