Global brokerage firm Jefferies suggests that the ongoing rerating of PSU stocks may exceed the average if the government leans towards value maximization for state-owned enterprises (SOEs). The PSU stock rerating trend persists, as noted by Jefferies, with potential for surpassing the average if the government aligns with "value maximization" for SOEs. Currently, the PSU index trades at a 40% discount to the Nifty, indicating a 15% potential return to the mean. Jefferies highlights NTPC, State Bank of India (SBI), and Coal India as its top PSU picks. In contrast to underperforming the Nifty by 10 percentage points prior to 2020, the PSU index has outperformed it by 70 points in the past 12 months. Recent improvements in return on equity (RoE) and earnings per share (EPS) have contributed to this outperformance. The government's discussions on policy shifts towards PSU value maximization in the February 2024 budget and subsequent Ministry of Finance statements have been noteworthy. Over the past five years, there has been a visible shift away from the ETF-style disinvestment of PSU shares towards a strategy that encompasses asset monetization, stake sales, and dividends. Furthermore, stock performance is increasingly factoring into PSU top management evaluations. Jefferies underscores that long-term rerating of SOEs could be driven by enhancements in governance.