From all my posts if you have come to the conclusion that I am against PSU companies, you may not be very wrong.

Are the employees in these companies to be blamed for their plight?

Yes and No.

I have known extremely committed and well meaning PSU employees. I used to know a person in one of the oil majors – and I would think of him as an authority of risk. In one of the deals with an Indian corporate he saved Rs. 200 crores (we are talking 1998-9 figures). Obviously he did not get any recognition for this.

Now I also know the kind of expenses that are thrust on PSU organisations – which leads me to believe that these organisations can NEVER be run on professional or commercial lines. Imagine that for such a long period of time Air India never suggested setting up a pilot academy. I also know of a contract in which a psu pays 4x the price which its competitors pay.

Surely the top management knows this. So the lethargy percolates.

Yesterday I made the mistake of travelling Chennai-Mum by AI. It was 3 hrs late, no apologies on the ground or after we boarded. There was one guy – perhaps from the Civil aviation ministry throwing his weight around, but the crew handled him well. My full sympathies for the honest, hard working and enthu workers of a psu.

However given a choice I will not invest in them. I have made money in holding SBI from Rs. 90 to 2k+, Ntpc, Coal India (still holding), Ongc, Engineers India. Still planning to add Ntpc…but only as a yield stock as and when it gets attractive.

How does the market react to all this? Simply by giving a lower p/e ratio

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  1. At Gun Shot….. 🙂 How much one should expose to PSU when it comes to investing in stocks? there are few who only invest in PSU.

    Some completely ignore it. SBI, BHEL, Still hold value???

  2. Hello Subra Sir,
    I bumped into your website recently..and surely have come across a big “Khazana”! 🙂 Will surely love to read all your articles as time permits
    I have one suggestion, is there anyway we can see the date of the article, next to the title, or somewhere at the top?

  3. thanks aditi…are you one of the aditis whom I know? Frankly the date of the article does not matter. On the right side you will see the topics..which is perhaps more relevant. At the bottom it says…’posted on…’ and the date is available…

  4. Spot on ! Sympathy for PSUs is different from putting your money into them.
    Only last week was with a top insurance lawyer – he is appalled by the lack of claims management process in private players- comparatively PSUs have better processes and believe-it-or-not better attitude. All non-life of course.
    Currently processing a claim of a senior management – such a relief to deal with PSU.
    But they will never be as profitable as they should be.

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