The top honchos of the key listed Central Public Sector Enterprises (CPSEs) will learn communication skills for better perception among stock market participants. They will be given coaching on how to talk about fundamentals, answer queries and explain the rationale behind every plan.
The Department of Investment and Public Asset Management (DIPAM) is planning to organise special communication workshop for key management personnel of top 10-15 Central Public Sector Enterprises (CPSEs) next month.
“It will be like a coaching platform,” a senior government official told businessline, adding that experienced communication professionals will be resource persons. Later, a similar workshop will be organised for senior officials of CPSEs who are responsible for communication.
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As on date, there are 82 public sector undertakings listed on the stock exchange comprising 62 CPSEs, 12 PSBs (Public Sector Banks), 3 Public Sector Insurance Companies and IDBI Bank. Though CPSEs are good in terms of fundamentals in terms of performance on stock exchanges, they lag behind peers from the private sector; one key reason has been perception. The workshop aims to help CPSEs in improving the perception, the official added.
Revised MoU
Effective communication is also required keeping in mind the revised Memorandum of Understanding (MoU) between the Government and the CPSE. The framework for the MoU System using an online dashboard for the target setting and performance evaluation of CPSEs has been put in place and made applicable from FY21-FY22 and onwards. The parameters included in the revised MoU process are market oriented, reflecting the shareholders’ interest in terms of growth in revenue, EBITDA margin, return on net worth, return on capital employed, asset turnover ratio, and market capitalisation. Adequate weightage has also been given to production linked parameters pertaining to CPSE’s core operations.
All the parameters are quantifiable and verifiable from the documents available in the public domain. Besides, certain government’s priorities/programmes such as procurement from MSEs, CSR, etc. have also been included for compliance by CPSEs.
The MoU performance is rated in a scale of five: excellent, very good, good, fair and poor, and these ratings are linked to the incentives of the CPSEs’ management staff. “Stock market performance is also a key component in the MoU. As the representatives of the top management are in the forefront, sharing details about the performance of a company, communication enhancement is important,” the official said.
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Meanwhile, the Government claims that due to better management of PSUs, their share prices have tremendously increased in last three years. In a recent social media post, Finance Minister Nirmala Sitharaman highlighted that total market cap of all 81 listed PSUs has grown by 225 per cent. Returns by NIFTY CPSE of nearly 78.8 per cent have significantly outpaced NIFTY 500 (27.4 per cent) and NIFTY 50 (22.5 per cent)
Market Cap of 12 listed PSBs has increased 2.95 times (195 per cent) from Rs. 5.45 lakh crore (as of March 31, 2021) to Rs. 16.12 lakh crore (as of March 31, 2024 ). Notably, 15 CPSEs have experienced an impressive CAGR ranging from 76-100 per cent reflecting substantial value appreciation and investor confidence. Additionally, 25 CPSEs have demonstrated strong growth with CAGR ranging between 51 per cent and 75 per cent, while 28 CPSEs have shown steady expansion within the range of 26 per cent to 50 per cent.