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Why are top PSU companies not hiring?

Might hire a person who just retired, says Capgemini

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Led by the IT giants Tata Consultancy Services (TCS) and Infosys, the top listed companies by market capitalisation have reported net increase in employees to their total headcount in FY22, according to analysis from the annual reports.


Of them, TCS closed the year ended March with all-time high net addition of 103,546 employees, while Infosys hired 85,000 fresh college graduates, with a net addition of 54,000 employees. IT companies are battling high attrition, fueled by a sharp rise in demand for automation and digitalisation across all industry sectors. The software behemoths are compensating the same with high fresher recruitments.



Meanwhile, oil-to-telecom conglomerate Reliance Industries recorded the highest net addition during FY22 with 107,000 employees. In the banking services, HDFC Bank and ICICI Bank added 21,486 employees and 7,094 in the financial year respectively.


The hiring outlook is strong too in the near term. According to a teamlease report, the corporates “intent to hire” showed a substantial increase of 7% for the ongoing July-September quarter to 61% and it might hit 70% in the coming quarters largely driven by hiring from tier-2 cities.


Now, if we look at most of the listed PSUs, employee headcount has shrunk in FY22. This was the trend observed across sectors. Employment in PSUs is categorised as ‘on-roll’ and ‘off-roll’. Managerial staff, supervisory and non-executive employees fall under the on-roll category. Casual and contract workers are classified as ‘off-roll’ staff.


India’s largest state-owned bank State Bank of India headcount was lower at 244,250 in FY22, compared with 245,652 in FY21. Indian Oil Corporation (IOC) too saw its employee strength drop marginally to 31,254. Meanwhile, BPCL employees fell to 8,594 in FY22 from over 9,000 in the previous fiscal.


Meanwhile, Coal India and GAIL too saw its employee count drop. Indian Railways’ ticketing and tourism arm IRCTC and SBI Life Insurance are the only companies among the top 15 PSUs that have reported an increase in the employee strength in FY22.


According to a report in a national daily, the fall in employee count has been coming down for many years. SBI saw its employee numbers go up when there was a merger with five other small banks in 2017-18. ONGC and NTPC had reported employee increase or hired many years ago. So, what explains this phenomenon and why are PSU companies not hiring or increasing their headcount?


[Byte of Radhicka Kapoor, Senior Visiting Fellow, ICRIER]

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Are Indian stock markets turning domestic?

stock markets, Nifty50

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When the global headwinds became stronger and foreign investors started losing faith in Indian equity markets, it’s the domestic investors who filled the void. Their belief in India’s growth story, and in its strong economic fundamentals appeared unshakable.


A research report by Morgan Stanley says that since 2015, the holdings of foreign portfolio investors (FPI), in a sample of 75 Indian companies, have declined about 230 basis points (bps) to 24.8 per cent, while domestic mutual funds (MFs) have increased their stake by 580 bps to 9.5 per cent and individual investors by 157 bps to 9 per cent in the same period.





The FPI selling has been brutal since October last year. During the nine-month period since October, the investors net sold equities worth Rs 2.56 trillion, owing to a series of factors including geopolitical uncertainties and tightening monetary policy across central banks. In the June month alone, FPIs pulled out over Rs 50,000 crore, making it the worst sell-off in nearly two years. However, the tide turned in July as foreign investors turned net buyers, investing Rs 5,000 crore in Indian markets.


But the FPIs selling in the recent past cannot be the only reason why domestic investors came out on top. Let us take a larger sample. That of 1,770 NSE-listed companies for which the shareholding patterns are available.


So, in these companies, the share of domestic institutional investors (DIIs) along with retail and high networth individual (HNI) investors in the NSE-listed companies reached an all-time high of 23.53 per cent as of June end, according to data from primeinfobase. Domestic investors include domestic institutions such as mutual funds, insurance companies and pension funds etc.


The share of mutual fund holdings in Indian companies climbed to 7.75% in FY22 from 4.99% in FY17, while that of insurance companies and institutional investor LIC has declined during the same period.


The massive inflow of retail investors into the equity markets via Systematic Investment Plan or SIP and other routes has also contributed to the rise of domestic investments. According to the data available, there are about 55.5 million mutual fund SIP accounts through which investors regularly invest. Since FY17, SIP contributions have nearly tripled to Rs 1.24 trillion as of FY22.


The SIPs’ assets under management (AUM) climbed to Rs 5.76 lakh crore at the end of FY22, growing over 30 per cent annually in the last five years, according to data from Association of Mutual Funds in India. Retail investors total ownership in stocks climbed to 7.42% at the end of FY22 from 6.79% in FY17.


In addition, India’s pension fund EPF investments since 2015 in equities have ensured steady inflows into the markets. The EPFO had invested around Rs 1.23 trillion in exchange-traded funds (ETF) as of FY21. It has also invested in a pool of public sector companies over the years.


So, will this trend sustain? And is it a good sign that markets are not too dependent on foreign investors, who were once touted to be the “price setters”? Given their growing clout, Morgan Stanley has even handed over the tag to domestic investors.


Experts say that FIIs’ shareholding in Indian companies will rise over a period of time, given their relative under-allocation to India. At the same time, domestic investors’ shareholding will continue to remain strong. And it all bodes well for the market.

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TMS Ep116: Russia-Ukraine crisis, NSE, markets, red herring prospectus

TMS116

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Just like the world, India too caught its breath and figured out the next course of action as Russian troops stormed into Ukrainian cities early Thursday. The Indian government is now scrambling all the resources to evacuate its 20,000 citizens from the eastern European country, whose air space has been shut since the offensive. Apart from this, the war will also have its economic consequences too. Back home, the India’s largest bourse, National Stock Exchange, is at the centre of a controversy. And at the heart of that controversy is a mysterious yogi everyone is talking about now. Chitra Ramkrishna, a founding member of NSE who was at the helm between 2013 and 2016, has told investigators probing alleged irregularities during her tenure, that she was being guided by the mystic who lived in Himalayas. But did that mystic really lived in the Himalayas? Or was he moving around in the plush exchange office of Mumbai? Meanwhile, the Russian invasion led to a bloodbath on Dalal Street.

Global financial markets were rattled too. While most equity markets across the globe corrected sharply, Brent Crude oil hit the psychological level of 100 dollars a barrel. These developments along with other headwinds have kept the markets choppy in the February F&O series, which turned out to be one of the most volatile series since April 2021 F&O expiry. Will the March series be equally volatile? What should your strategy be in this backdrop? Markets are eagerly awaiting the IPO of government-owned Life Insurance Corporation of India or LIC. But even before it hits the primary market, LIC filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India. This episode of the podcast tells more about this document and why it is filed.

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Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor



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For more information call us at 9891563359.
We are a group of best insurance advisors in Delhi. We are experts in LIC and have received number of awards.
If you are near Delhi or Rohini or Pitampura Contact Us Here