State-run firms have been the biggest wealth destructors in the last six years, despite operating in monopolistic or oligopolistic setups, asset managers said on Monday.
The government has been pressing citizens to pay taxes and be compliant, but they have very little to show regarding improved efficiencies in the companies they themselves own, the managers added.
“If you look at the biggest wealth destroyer over the last six years, it has been the government-owned companies… PSUs including banks, utilities, oil companies etc. While it is nice to tell Indians to reform, we also have to hold mirror in some of these,” said Anand Radhakrishnan, CIO of Franklin Templeton.
Navneet Munot, CIO of SBI MF, said the PSU indices have been flat since March 2009, against a 5x return for many other asset classes.
Nilesh Shah, MD of Kotak MF, said at one point, MTNL commanded a larger m-cap than RIL, but now the latter’s valuation is higher than all listed PSU put together.