Shares of Gujarat government-owned companies are witnessing a sell-off ahead of the state election results amid heightened uncertainty about the Bharatiya Janata Party’s prospects in the polls.
Shares of Gujarat State Fertilizers & Chemicals (GSFC), Gujarat Mineral Development Corporation (GMDC) and Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) have dropped 10-15 per cent since November 1 after rallying strongly for the previous three months.
The mid-cap index gained 0.8 per cent and the small-cap index rose 1.6 per cent since November.
Analysts said investors are worried that if BJP loses the Gujarat state elections, the prospects of these companies would turn hazy.
“Investors fear that uncertainty post-election results could adversely impact the state owned companies which have shown tremendous growth under BJP government,” said G Chokkalingam, CEO, Equinomics Research & Advisory Services.
Prior to November, these stocks had run up on expectations that BJP would win the elections. Despite prepoll survey projecting a BJP victory, market participants are nervous.
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