Should PSUs be considered an essential part of portfolio? Vikas Khemani answers
Vikas Khemani, Founder, Carnelian Asset Management, says in the last 10 years, we have seen a remarkable shift in the accountability and governance and the execution of the PSEs and that has made many of these public sector enterprises very valuable. Banks are moving towards 16-17% ROE profiles. All public sector units in defence are doing very well with the new refound growth sector. All PSUs except probably oil and marketing, still have a bit of a struggle. That is also picking up, but whether it is gas or any other, the PSUs are being run reasonably well. While BSNL is still facing challenges, we have seen a remarkable shift happening in the railway operation.
PSUs have played in nation-building and also in value creation for the shareholder community. Earlier, one-and-a-half decade back, PSUs were not even considered investor grade, but now they form a very special part of the portfolios. How do you see this transition and the change in the mindset which has happened?
Vikas Khemani: After 70 years, banks were nationalised to provide banking for the poor, but never ended up serving the purpose. Today, a technology-driven initiative by the Prime Minister has made banking for all available and not only banking for all, we have had innovations like UPI and all those things within the public sector, which is again, we underestimate what the public sector can achieve.
We have had the UPI set up with very little cost and globally acclaimed infrastructure. So, in the last 10 years, we have seen a remarkable shift in
