Why Prashant Jain likes PSUs

Prashant Jain, ED & CIO, HDFC AMC has been known to bet on PSUs though they have not been long-term wealth creators. We asked him the reason for his optimism about them and also why the market has been ignoring them. Prashant Jain: In my opinion, there are a few misconceptions about public sector companies. Neither all PSU stocks are bad, nor are all private sector stocks good. The large number of failures/problems and significant wealth erosion in several private-sector companies, especially in infrastructure, the NBFC space, banking, telecom, etc., and significant loss of economic value in PSUs (including some unlisted ones) in telecom, airlines, etc., suggests that it is imprudent to make blanket judgements based on ownership alone. Some of the most successful companies in India in power generation, transmission, oil refining and marketing, logistics, NBFCs, etc., are in fact from the public sector. However, it is also true that exceptional companies are mostly from the private sector. This is understandable as PSUs have ce