Hopes of an NDA government may boost PSU sector: Dipan Mehta

In a chat with ET Now, Dipan Mehta, Member BSE and NSE shares his views on the PSU space.

ET Now: Do you like PSU as a space?

Dipan Mehta: From a fundamental analysis basis, one would like to avoid PSUs completely given the kind of government interference. But, there is hope that if there is change of government at the centre, then PSUs may be given far more autonomy and there will be less interference. There is a majority view that the post election trade could be in favour of the PSU companies.

When the NDA was in power, PSU did exceedingly well. There was lot of spin around complete divestment or privatisation. These theories or expectations could come back again if the NDA comes to power.

Timing has gone in favour of this particular fund where investors want to look at increasing exposure to equities and it is a good bet in terms of good favourable election outcome.

Of course, one cannot deny the fact that PSUs are extremely valuable in terms of the assets and monopolistic position.

They are not run on sound business principles and these companies are utilised more by the government to fulfil their own objectives rather than the objective of the business or the minority shareholders, which is why PSUs have been out of favour. But, there is some promise and things could definitely change.