Stocks of nearly all public sector undertakings (PSUs), except one, have faced significant erosion over the last seven months. Leading the pack of losers is the Life Insurance Corporation of India (LIC), which has shed nearly ₹3 lakh crore in market capitalisation. The country’s largest state-owned lender, State Bank of India (SBI), followed with a ₹1.6 lakh crore loss, while ONGC saw its market value decline by ₹1.5 lakh crore during the same period.
Other PSUs, including Hindustan Aeronautics, NTPC, Coal India, and Power Grid Corporation, have each lost at least ₹1 lakh crore in market capitalisation since August 1, 2024. Collectively, these seven companies have seen their valuations decline by ₹10.1 lakh crore, accounting for 41% of the total market erosion in PSU stocks.
Moreover, at least 10 PSU stocks have lost more than 50% of their value since the beginning of August. The list includes names like Cochin Shipyard, Hindustan Organic Chemicals, and Chennai Petroleum Corporation
, among others.
The only PSU that has defied the broader sell-off is SBI Cards & Payment Services, which has added ₹11,300 crore to its market capitalisation over the last seven months.
According to Chris Wood of Jefferies, the latest correction in the Indian market is driven more by technical factors rather than fundamental issues. The global fund, which recently removed Coal India from its India portfolio, noted that “For the first time since the market began a proper correction, GREED & Fear’s base case is that the sell-off is primarily technical in nature, driven by multiple compression, rather than any major macroeconomic concerns,” observed Chris Wood.
He further added that a key driver of the sell-off has been aggressive foreign selling. The foreign portfolio investors (FPIs) have offloaded nearly $13 billion so far this year, bringing their total sell-off since the end of September 2024 to a staggering $25 billion.
Technical analyst Rohit Srivastava of Indiacharts.com said, “Other areas which are beaten down, where I would look, is going to be PSU stocks. Because if I look at a slightly higher time frame, the weekly RSI of PSU stocks is back to 30, and the last time that happened was in the last bear market. We are getting very oversold readings in some of the sector indices, like PSUs, maybe even PSU banks. So that entire PSU basket is getting very oversold.”
It is important to note that the Relative Strength Index (RSI) is a technical analysis tool that measures the momentum of price changes in an asset. It’s used to identify overbought and oversold conditions, and to provide buy and sell signals.
