Samvat 2079: Disinvestment may not pick up big time for another 18 months, says Madhusudan Kela

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26 Aug, 2025 12:21

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Founder of MK Ventures Madhusudan Kela has been bullish on state-run banks over the past few years now. Capex upcycle and strong provision coverage ratios have been the reasons behind his optimism on PSU banks.

The rally in Nifty PSU Bank index has been a testament to his optimism. The index has gained 28 percent in 2022 so far with share price of SBI, Canara Bank, Indian Bank and Bank of Baroda having advanced 20-70 percent.

But a pause in the government’s disinvestment pipeline, according to Kela, might spoil the party for the PSU pack as a whole. Speaking at the Moneycontrol Muhurat Roundtable, the market veteran said, “I don’t think a lot will get disinvested in the next 18 months. I'm not particularly very excited on that front.”

“2024 is an election year. Till then, only a few pending cases may get resolved. But post 2024, if PM Modi comes back with a stable BJP government, only then you will see a real big drive towards disinvestment,” he added.

Watch: Samvat 2079 | D-Street Stars Talk About Markets, Sectors And Stocks To Watch | Muhurat Roundtable

Currently on the disinvestment front, the central government has invited bids for the sale of 60.72 percent stake in IDBI Bank. LIC and the government hold 49.24 percent and 45.48 percent in the bank respectively. Roadshows for CONCOR disinvestment have been kicked off while oil refiner BPCL’s disinvestment has been put on hold for now.

Meanwhile, veteran fund manager Prashant Jain believes the best is yet to come in PSU stocks. Some of the PSU stocks, especially from the defence space like Bharat Dynamics and Hindustan Aeronautics, have doubled investors’ wealth in last one year.

“There are both good and bad PSUs. If you focus on good companies and good valuations, eventually returns will come. PSU stocks in the banking space, mining space, power and defence sectors have done extremely well. And, I think there is still some value left in the banking and energy space,” he said. During his tenure at HDFC AMC, Jain had taken ‘contrarian’ bets on Coal India, NTPC, Power Grid Corporation and SBI.