Baiju Kalesh
Everytime the Sensex scales a new peak, there is a mad scramble to figure out who tops the chart in the market cap sweepstakes. Well, it is definitely not either of the Ambani brothers.
It happens to be the President of India, who holds all the shares of government-owned companies. The notional wealth of the President of India climbed a staggering $190 billion, a steep rise of 116 per cent in rupee terms since March 2007.
As on November, the government holding in listed stocks is valued at $327 billion. If the pile-up of forex reserves — $261 billion — with the Reserve Bank of India is added, the collective wealth managed by the government stands at $558 billion, just a shade off 60 per cent of India’s $1-trillion economy.
For more eye-popping details: it is not the government-owned Oil and Natural Gas Company or the Fortune 500 Indian Oil Corporation that commands the maximum valuation. The little-known National Mineral Development Corporation (NMDC) and Metals and Mineral Trading Corporation (MMTC) have added most to the President’s portfolio — almost $100 billion, says Credit Suisse in a report to its clients on 5 November.
The growing hunt for limited resources to power infrastructure of growing economies such as India and China is driving valuations of such companies to the roof.
This humongous wealth is sufficient to retire the nation’s external debt two times over. India’s fiscal deficit can be wiped out by just about a 9 per cent yield on the total value. It is enough to fund the entire country’s infrastructure needs.
However, now that privatisation has been put on the backburner, it is like having the cake, but not being able to quite relish it.
