Do Industry-wise Investment Returns Move with Aggregate Investment Returns? (The Case of Indian CPSEs)
Keywords:
CPSEs, investment returns, ROA, ROCE, ROEAbstract
Investment return can be defined as a performance measure which is used to calculate the
effectiveness of an investment. It judges the efficacy of diverse investments of an enterprise. ROI is an
endeavor to determine the profit of a particular investment in relation to the cost of its investment.
The Government of India has established the Central Public Sector Enterprises (CPSEs) that plays a
vital role in the growth process of Indian economy. They are regarded as strategic players in the
building of an economy. Over the years, the performance of the CPSEs is not satisfactory.
Accordingly, the Indian Government started the route of disinvestment to develop competency and
increase output of the CPSEs. The chief intention of this research work is to contrast the movement of
industry-wise investment returns with the pooled investment returns of Indian CPSEs from 2010–2011
to 2019–2020. For this purpose, Man-Whitney U-Test is employed in the study. Overall, the
performances of investment returns (i.e., ROA, ROCE, and ROE) in majority of the selected industries
have not moved with the aggregate investment returns of the CPSEs. This indicates that industry
precise factors are strong enough in determining their individual performance with respect to
investment returns. Further study may be conducted with respect to movement of investment returns at
company level.
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