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| A mine owned by GMDC |
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.
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.
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.
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