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PSUs face potential irrelevance in an increasingly disrupted world: Report

The government’s privatisation policy for PSUs fails to address their potential irrelevance in an increasingly complex and disrupted world, as per a report by Kotak Institutional Equities.

The report said PSU companies have already become irrelevant in most B2C sectors such as aviation, telecommunications or are steadily losing market shares to their private sector competitors in financials.

The market certainly does not have a favourable view of the future prospects of the PSUs given the large erosion in market capitalisation of most PSUs over time, it added.

“We see large existential issues for PSUs given their presence in challenged and challenging industries. The government’s privatisation policy may not achieve strategic (value maximisation) and financial (asset monetisation) objectives either,” it said.

The government’s privatisation policy may be bold versus historical standards but may fall short of the demands of an increasingly complex and disrupted world.

Source
ET Energy World
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