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Investment Hub

Created by : Sukumar Maity, Sr. Associate, IDBI Bank  | 02 21 2009 04:38:16 +0000
Industry : Equity Research/AnalyticsFunctional Area : India(Markets)
Keywords : investment psu dividends
Activity:  581 views;  last activity : 07 06 2010 20:18:09 +0000

Investment in PSU stocks, will the dividends pay off?

  Rate : 
Yes Vs No
Support   Support
Arguments in: "Investment in PSU"

If one is going for investment then investment in good PSUs is gold mine.Reasons for same is as follows:

1. Massive land bank available at rock bottom price.

2. Huge order books due to monopoly.

3. Huge cash reserve available to grow inorganicaly.

4. Above all its backed by Govt.

and understand PSUs ultimately going under divestment by govt and then only its going to give you huge value. Example: Hind Zinc, Nevelli lignite, VSNL (Now Tata com.), etc. and beside that you are talking about investment not speculation.

By Dushyant Hada, Territory Manager  | 04 02 2009 12:03:43 +0000

I thik it will, they are considered as Navratna of govt. stocks and their dividends will definitely pay off though it may take sometime.

By Sukumar Maity, Sr. Associate, IDBI Bank  | 02 21 2009 04:38:16 +0000

Gov. usually spend on banking, engg., oil and others where the profit margin are only minimal then where is the point of dividends come into existence.

By Surender Singh, Associate, HDFC Bank  | 02 21 2009 04:42:18 +0000

I am sorry to say this but I think in the exact opposite direction, the govt. is being the biggest shareholder in these companies and the profit margin of these companies is also negative every year.

By Subhrangshu Das, Sr. Associate,bulls Research  | 02 21 2009 04:40:58 +0000
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