Investment Advisor, PN Vijay believes this divestment will make Nalco and Neyveli Lignite more attractive to FIIs.
Commenting on the FM's statements today, he says, "These type of things drive investor sentiments for FDI or the FII lot. At the retail level, it does not mean much, but the indications that FM was giving out today, was quite positive."
Excerpts from CNBC - TV18's exclusive interview with PN Vijay:
Is the Left just making noises or do you think there will be serious opposition?
I don't know. Last time they managed to stall something similar that happened in BHEL. I think the government stake in BHEL was a bit lower.
Here, the government holding is at very high levels. So the basic nature of these PSUs has not changed at all. It still remains under government's undertakings. In a normal course, it would have been almost a non- issue, but as it happened, it could raise some controversy.
Overall, how would you rate what the FM had to say?
I think he was just saying that he wants to go ahead. This has been in the agenda for some time. I think it is good because the UPA government should increasingly reinforce its commitment towards reforms.
These types of things drive investor sentiments for FDI or the FII lot. At the retail level, it does not mean much, but the indications that FM was giving out today, was quite positive.
Would you buy Nalco and Neyveli at this price?
Both these stocks, especially Neyveli, have been beaten down so much. They are both attractive, but we know that dynamics of the shares don't change at all for investment.
I am sure that the prices that are offered would be quite attractive to the public. They are just in the limelight and it is more of a sentiment driven rise and not based on fundamentals.
Do you think Nalco will now be more attractive to FIIs?
Marginally, because if one sees the daily volumes, in Nalco, they are not bad, in fact they are quite high. Nalco is a very high capital and high liquid stock.
For Neyveli, may be the argument is more valid. In some of the ways, the indices are calculated and floating stocks are taken for the purpose of looking at companies.
The government selling would lead to the increase in floating stocks and then FIIs will also get a bit higher percentage of the floating stock. So that benefit would definitely be there.
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