My first reaction was: “What a joke, public sector Companies are now planning to make profit.” On a serious note, I am unable to understand why government is providing a 300cr Subsidy. the three possibilities:
- Government of India is providing a 5% cash incentive to help Reliance Mutual funds raise funds.
- This is a market manipulation tactic. 6,000 cr of fresh capital locked in PSU ETF will prop up the price and help GoI realize better proceeds during disinvestment.
- This is GoI’s way of compensating the investors for the mismanagement and systematic robbing the investors of PSU companies.
Whatever be the reason, this 5% subsidy is the only only reason why you can consider this scheme. After all 10k of free money is hard to pass on. Additionally the dividend yield of 4.3% is not hard to ignore. However Psu Companies constituting a portion of your portfolio is suicidal.
Filed under: Musings
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