President Of India Portfolio, Shareholdings & Investments

In the public sector or government-owned companies, most shares are owned by the government of India. But does the government as an entity hold the said shares? Public sector companies, with majority ownership by the government, are owned in India’s name. They are all part of the President of India’s portfolio. How does the mechanism work? 

Can the portfolio be a guide to diversification? And what does the President of India’s portfolio look like? Let’s understand.

Who manages the President of India fund portfolio?

The term “President of India” in a company’s shareholding pattern signifies shares owned by the President on behalf of the Government of India. The government can own shares in publicly listed companies. These shares, held in trust by the President, are often managed by agencies like the Department of Investment and Public Asset Management (DIPAM). The government may acquire ownership stakes in companies for several reasons-

• Strategic Interests: The government may invest in companies crucial to national interests, such as defense, energy, telecommunications, or infrastructure.
• Economic Policy: Governments can influence monetary policy by owning shares in certain companies. They might intervene to stabilize markets, promote specific industries, or address market failures.
• Financial Investment: The government of India may hold stocks as part of their investment portfolios, aiming to earn returns from companies they believe will increase in value.
• Public Enterprises: Some governments directly own and operate companies in specific sectors. The government can wholly or partially own these state-owned enterprises.
• Corporate Governance: With significant stakes, governments can influence corporate governance, including board appointments, dividend policies, and major strategic decisions in public enterprises.
• Privatization: Governments may privatize state-owned enterprises by selling their stakes to private investors or through public stock offerings. 

Portfolio of President of India:

Before proceeding with the analysis, let’s first see what a stock portfolio is. A stock market portfolio is a collection of financial assets an investor holds. It can include stocks, bonds, mutual funds, and ETFs. 

In the case of the President of India portfolio, the following is the list of individual stocks included in the portfolio-

(Source- Ticker)

President of India Portfolio Analysis:

1. The sectoral breakdown of the portfolio is scattered into multiple sectors, and a significant portion is assigned to public sector banks. 
2. The recent changes in the portfolio include the addition of shares held in the State Bank of India. When compared with the quarter ending December 2023 (57.49%), the portfolio now holds 57.54% shares in SBI (as of quarter ending March 2024)
3. Another significant change was the purchase made in March 2024. Shares of Shipping Corporation of India Land and Asset Limited were added to the portfolio, and the President of India has 63.75% of the stake in the company. 
4. From December 2023 to March 2024, deductions were made in the shares of NLC India Limited (-7%), NHPC Limited (-3.55%), Union Bank of India (-2.23%), ITI Limited (-0.28%) and Housing and Urban Development Corporation Limited (-0.17%). 
5. The quarter ending March 2024 data shows 55 portfolio companies paid dividends. The dividend yield ranged between 0.08% and 7.16%. 
6. During the financial year 2023-24, the government increased its stake in IFCI from 66.4% in the March quarter to 70.3% by the end of the previous quarter. The Bank of Maharashtra’s stake was reduced by 4.5%. Additionally, the government sold about a 3% stake in Coal India.

The strategic allocation has held the performance metrics of the President of India’s portfolio. As of March 2024, the following can be concluded as the outcome of this allocation-

• The investments align with key national projects, boosting economic growth.
• The portfolio stocks emphasize green investments and support environmental sustainability.
• The diverse asset allocation reduces risk and promotes steady returns.
• Strategic investments in emerging sectors ensure long-term growth.
• The portfolio’s investment in technology and innovation drives progress and ensures it remains a future-proof, all-weather portfolio.

Can the President of India Portfolio drive growth?

The President’s stock portfolio plays a crucial role in driving sustainable growth. As an institutional investor for the government, these holdings support various sectors of the economy. By investing in diverse industries, the portfolio aids job creation, innovation, and economic prosperity. This strategy aligns with the government’s aim of inclusive and sustainable growth, ensuring economic progress benefits all parts of society.

The President’s investment choices also likely consider environmental sustainability, social responsibility, and good governance. This responsible investing promotes long-term value creation and sets an example for other investors to follow accountability and practice ethical principles.

Should you invest in the President of India portfolio and holding?

Filling your portfolio with the stocks from the President of India’s portfolio has its share of pros and cons. 

A] Advantages of investing in such companies:

• Stability: Government-backed companies are stable due to government support.
• Resources: They have access to substantial resources, including funding and infrastructure.
• Preferential Treatment: These companies often benefit from favorable regulations, subsidies, and contracts.
• Long-term Orientation: They prioritize long-term goals over short-term gains.

B] Drawbacks of investing in said companies: 

• Political Interference: Prone to meddling by political entities in operations and decision-making.
• Bureaucratic Hurdles: Due to bureaucratic inefficiencies, the company may face delays and obstacles.
• Accountability Deficit: Often lacks strict accountability to shareholders because of government ownership.
• Transparency Challenges: May struggle with transparency in financial disclosures and operations.
• Political Risk: Vulnerable to risks from government policy changes or leadership shifts.

Conclusion:

The President of India portfolio has a net worth of Rs.44,16,416.78 crores, making it India’s most extensive stock portfolio. If investing in public sector enterprises aligns with your investment goals and fits your portfolio, you can track the President of India’s portfolio to monitor dividend stocks and multi-baggers like Housing and Urban Development Corporation Limited (HUDCO). However, consulting a SEBI-registered financial advisory service is always better to identify and add undervalued stocks, debt instruments, and public sector company stocks to your portfolio.

Archana Chettiar

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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