BAJAJ BROKING
April 08, 2025
14 mins read
Government stocks represent shares in companies that are owned or controlled by the government. These stocks are typically associated with Public Sector Undertakings (PSUs), which play a significant role in the Indian economy by contributing to various sectors such as energy, telecommunications, and manufacturing. The blog talks about the leading government stocks based on market capitalization, as well as things the average investor with a demat account should know regarding such stocks.
Definition: Government stocks are shares of companies that are owned by the government, either at the central or state level.
Ownership: The government holds at least 50% of the paid-up share capital in these companies.
Types: They can be classified into Central PSUs (owned by the central government) and State PSUs (owned by state governments).
The government sector in India is characterized by its significant involvement in economic development and social welfare. Key features include:
Public Sector Undertakings (PSUs): These entities are crucial for infrastructure development and job creation. They operate across various sectors, including:
Energy
Telecommunications
Manufacturing
Finance
Economic Contribution: PSUs contribute substantially to India's GDP and play a vital role in driving economic growth and stability.
Employment Generation: They provide millions of jobs, contributing to socio-economic welfare.
Regulatory Framework: The sector is governed by various laws and regulations to ensure transparency and accountability.
Government stocks come with distinct features that appeal to investors:
Stability: Generally perceived as safer investments due to government backing.
Dividends: Many PSUs offer attractive dividend yields, providing regular income to investors.
Long-term Growth Potential: With ongoing government initiatives for infrastructure and development, these stocks have the potential for long-term capital appreciation.
Market Cap: Government stocks often rank high in market capitalization, making them significant players in the stock market.
The table below lists the top government-owned (public sector) stocks in India based on their market capitalisation, as per the most recent available data:
Company Name | Last Price (₹) | % Change | 52-Week High (₹) | 52-Week Low (₹) | Market Cap (₹ Cr) | Sector |
753.00 | 0.51 | 912.10 | 679.65 | 6,72,023.89 | Bank - Public | |
351.15 | 2.78 | 448.30 | 292.70 | 3,40,498.43 | Power Generation/Distribution | |
242.55 | 2.88 | 344.60 | 215.20 | 3,05,134.67 | Oil Exploration and Production | |
283.90 | 1.41 | 366.20 | 247.50 | 2,64,044.14 | Power Generation/Distribution | |
406.05 | 2.37 | 544.70 | 349.20 | 2,50,237.58 | Coal |
Source: MoneyControl as of Mar 23, 2025
This table provides a snapshot of leading government sector companies in India by market capitalisation. These entities operate across key sectors such as banking, energy, and infrastructure and are among the most actively tracked public sector stocks on Indian exchanges.
Company | Market Cap (₹ Cr) | Sector |
SBI | 6,72,023.89 | Bank - Public |
NTPC | 3,40,498.43 | Power Generation/Distribution |
ONGC | 3,05,134.67 | Oil Exploration and Production |
Power Grid Corp | 2,64,044.14 | Power Generation/Distribution |
Coal India | 2,50,237.58 | Coal |
Source: MoneyControl
State Bank of India (SBI) is India’s largest public sector bank in terms of balance sheet size, profits, and branch network. Founded over two centuries ago, SBI operates across retail banking, treasury operations, investment banking, pension funds, general insurance, and digital banking services. The bank is undergoing rapid digital transformation and is expanding its financial services footprint both nationally and globally.
Key Financials and Metrics
Metric | Value |
Market Cap (₹ Cr) | 6,72,202.38 |
52-Week High (₹) | 912.00 |
52-Week Low (₹) | 680.00 |
TTM EPS (₹) | 88.91 |
TTM PE Ratio | 8.47 |
Book Value per Share (₹) | 538.75 |
P/B Ratio | 1.40 |
ROE (%) | 17.31 |
Dividend Yield (%) | 1.82 |
Source: MoneyContro
NTPC is India’s largest power generation company, operating across coal, gas, hydro, and renewable segments. It is actively involved in consultancy, power trading, and coal mining. Through its subsidiary NTPC Renewable Energy Ltd, the company is expanding its solar and green energy portfolio to meet sustainability targets.
Key Financials and Metrics
Metric | Value |
Market Cap (₹ Cr) | 3,40,643.88 |
52-Week High (₹) | 448.45 |
52-Week Low (₹) | 292.80 |
TTM EPS (₹) | 22.67 |
TTM PE Ratio | 15.50 |
Book Value per Share (₹) | 173.54 |
P/B Ratio | 2.03 |
ROE (%) | 12.95 |
Dividend Yield (%) | 2.21 |
Source: MoneyControl
ONGC is a government-owned oil and gas exploration and production company, responsible for producing most of India’s crude oil and natural gas. It operates through subsidiaries such as ONGC Videsh Ltd. and MRPL. ONGC is critical to India's energy security and is involved in both onshore and offshore operations.
Key Financials and Metrics
Metric | Value |
Market Cap (₹ Cr) | 3,04,971.13 |
52-Week High (₹) | 345.00 |
52-Week Low (₹) | 215.48 |
TTM EPS (₹) | 30.95 |
TTM PE Ratio | 7.83 |
Book Value per Share (₹) | 280.02 |
P/B Ratio | 0.87 |
ROE (%) | 14.60 |
Dividend Yield (%) | 5.05 |
Source: MoneyControl
Power Grid is a central PSU under the Ministry of Power, tasked with transmission of electricity across India. The company is responsible for establishing a strong national grid and plays a critical role in supporting India’s increasing power demand and integrating renewable energy into the grid.
Key Financials and Metrics
Metric | Value |
Market Cap (₹ Cr) | 2,63,300.09 |
52-Week High (₹) | 366.25 |
52-Week Low (₹) | 247.30 |
TTM EPS (₹) | 16.71 |
TTM PE Ratio | 16.94 |
Book Value per Share (₹) | 98.98 |
P/B Ratio | 2.87 |
ROE (%) | 17.87 |
Dividend Yield (%) | 3.97 |
Source: MoneyControl
Coal India is the world's largest coal producer and a key supplier of thermal and metallurgical coal to power, steel, and cement sectors. The company plays a pivotal role in India’s energy landscape and maintains long-standing contracts with major industrial consumers.
Key Financials and Metrics
Metric | Value |
Market Cap (₹ Cr) | 2,49,837.01 |
52-Week High (₹) | 543.55 |
52-Week Low (₹) | 349.25 |
TTM EPS (₹) | 55.88 |
TTM PE Ratio | 7.25 |
Book Value per Share (₹) | 156.09 |
P/B Ratio | 2.60 |
ROE (%) | 45.21 |
Dividend Yield (%) | 6.29 |
Source: MoneyControl
When considering investments in government sector stocks, several key factors should guide your decision-making process:
Financial Performance: Assess the company's revenue growth, profit margins, and debt levels. A consistent track record indicates stability and growth potential.
Government Policies: Changes in government policies can significantly impact stock performance. Keep an eye on upcoming IPO listings and policy shifts that may affect the sector.
Market Position: Evaluate the company's market share and competitive position within its industry.
Management Quality: Strong leadership can influence a company's success. Review the experience and track record of the management team.
Risk Tolerance: Align your investment choices with your risk tolerance, considering the inherent risks associated with government stocks.
Opening a trading account can facilitate your investment process, allowing you to buy and sell shares efficiently.
The performance of government stocks is influenced by various factors:
Economic Conditions: Economic growth or recession can affect demand for services provided by government companies.
Regulatory Environment: Government regulations can impact operational efficiency and profitability.
Market Sentiment: Investor sentiment towards government policies can lead to fluctuations in stock prices.
Global Events: International economic trends and geopolitical events may also play a role.
Understanding these factors is crucial for effective intraday trading strategies in government stocks.
Government stocks function similarly to regular stocks but have unique characteristics:
Ownership: These stocks represent ownership in companies primarily owned by the government.
Dividend Payments: Many government stocks typically offer dividends, providing income to shareholders.
Market Trading: Investors can buy and sell these stocks through a demat account, which holds shares electronically.
The performance of these stocks is often tied to government initiatives and economic policies, making them a stable investment option.
Here are some practical tips for investing in government stocks:
Research Thoroughly: Conduct comprehensive research on potential investments. Utilize a brokerage calculator to evaluate potential returns based on different scenarios.
Diversify Your Portfolio: Include a mix of government stocks across various sectors to mitigate risks.
Monitor Market Trends: Stay updated on market trends and economic indicators that may influence stock performance.
Consult Financial Advisors: If unsure, consider consulting financial advisors for tailored advice based on your investment goals.
Selecting the right government stocks involves careful analysis:
1. Evaluate Financial Health: Look for companies with strong balance sheets and consistent profitability.
2. Assess Growth Potential: Identify companies with growth prospects aligned with national development goals.
3. Review Historical Performance: Analyze past stock performance and dividend history.
4. Check Valuation Metrics: Use valuation ratios to compare against industry peers.
5. Open a Trading Account: Ensure you have a trading account set up for executing trades efficiently.
Government stocks are ideal for:
Conservative Investors: Those seeking stable returns with lower risk exposure will find these stocks appealing due to their backing by the government.
Long-term Investors: Individuals looking for steady growth over time can benefit from investing in these companies as they often align with national interests.
Income Seekers: Investors interested in regular dividend income should consider adding government stocks to their portfolios, especially those that prioritize high dividend payouts.
Understanding various factors influencing government sector stocks can enhance investment decisions while leveraging tools such as a demat account or brokerage calculator can streamline the investment process.
Investing in government stocks offers several significant reasons:
Stability and Security: These stocks are backed by the government, making them less susceptible to market volatility. They represent ownership in well-established entities in essential sectors like energy and infrastructure, providing a reliable investment anchor during turbulent times.
High Growth Potential: As India continues to develop, government companies are positioned to benefit from economic growth. Many operate in sectors with strong competitive advantages, presenting opportunities for long-term capital appreciation.
Strong Fundamentals: Government companies typically exhibit lower debt levels and strong financial health, translating to a lower risk profile for investors.
Regulatory Support: These entities benefit from robust governance frameworks, instilling investor confidence through accountability and oversight.
Investing in government stocks can be a prudent choice for certain investors:
Risk-Averse Investors: If you prefer stability over high-risk investments, government stocks are suitable due to their backing by the government.
Long-Term Investors: Those with a long-term horizon can capitalize on the growth potential of these stocks as the economy expands.
Income Seekers: Investors looking for regular income through dividends will find many government stocks appealing.
Opening a trading account can facilitate your investment process, allowing you to buy and sell shares efficiently.
While government stocks are generally safe, they do carry some risks:
Market Risk: Like all equities, government stocks can be affected by market fluctuations and investor sentiment.
Policy Risk: Changes in government policies or regulations can impact the performance of these companies.
Limited Upside Potential: Compared to high-growth private companies, government stocks may offer lower returns, which might not meet aggressive investment goals.
Understanding these risks is crucial for effective intraday trading strategies involving government stocks.
The advantages of investing in government stocks include:
Low Risk: Backed by the sovereign guarantee, these investments have minimal default risk.
Stable Returns: Many government stocks provide predictable dividend payments, offering consistent income streams.
Liquidity: Government stocks can be easily traded on stock exchanges, ensuring quick access to funds when needed.
Diversification: Including government stocks in your portfolio helps balance riskier investments, enhancing overall portfolio stability.
A diverse range of investors can participate in government stock investments:
Individual Investors: Retail investors seeking low-risk options can easily invest through brokers or online platforms using a demat account.
Institutions: Banks, mutual funds, and insurance companies often invest heavily in government securities for stability and predictable returns.
Foreign Investors: Foreign institutional investors (FIIs) and non-resident Indians (NRIs) can also invest within regulatory limits.
Investing in government stocks is generally considered low-risk compared to equities. However, it is not entirely without risk:
Economic Conditions: Economic downturns can affect stock performance even if they are backed by the government.
Interest Rate Changes: Fluctuations in interest rates can impact the attractiveness of fixed-income returns from these investments.
To invest in government stocks effectively:
1. Research Thoroughly: Understand the financial health and market position of potential investments.
2. Open a Trading Account: Set up an account with a broker to facilitate buying and selling shares.
3. Utilize a Brokerage Calculator: Use tools like a brokerage calculator to assess potential returns based on different investment scenarios.
4. Monitor Market Trends: Stay informed about economic indicators and policy changes that may affect your investments.
5. Diversify Your Portfolio: Include a mix of assets to balance risk and return effectively.
By following these steps, you can navigate the investment landscape of government stocks confidently.
Government policies significantly influence the performance of government stocks. Key impacts include:
● Budget Allocations: The Union Budget 2025-26 emphasized infrastructure development with a record ₹11.21 trillion allocation, boosting stocks in sectors like construction and railways.
● FDI Reforms: The increase in the FDI limit for the insurance sector to 100% is expected to attract foreign investment and enhance the performance of insurance-related government stocks.
● Green Energy Push: Investments in solar technology and electrolysers under the clean energy initiative have positively impacted renewable energy stocks.
During economic downturns, government stocks often exhibit resilience due to their backing by the state. Key observations:
● Defensive Nature: Essential sectors like utilities, railways, and energy remain stable as they cater to basic needs.
● Dividend Yields: Many government companies continue to provide dividends, offering income even during market volatility.
● Policy Support: Government interventions, such as increased capex spending during downturns, help stabilize these stocks.
The Union Budget 2025-26 introduced several measures impacting government stocks:
● Infrastructure Development: ₹11.21 trillion allocated for infrastructure projects, benefiting companies like L&T and IRB Infra.
● Railways: Increased capex for railways focused on Vande Bharat trains and safety systems like Kavach, boosting stocks such as Rail Vikas Nigam Limited.
● Green Energy: Significant investments in renewable energy technologies, favoring companies in solar and battery production.
● Insurance Sector Reform: FDI limit raised to 100%, expected to attract foreign capital into government-backed insurance companies.
Future trends suggest promising opportunities in government stocks:
● Sustainability Focus: Continued investments in green energy and waste management will drive growth in renewable energy and water treatment sectors.
● Digital Transformation: Increased focus on digital infrastructure under government initiatives will benefit tech-related PSUs.
● Upcoming IPOs: New IPOs from government entities are expected, providing fresh investment opportunities for retail investors.
Government sector stocks contribute significantly to India's GDP:
● Fiscal Contribution: Capex spending of ₹14.82 lakh crore under the Union Budget 2025 accounts for a substantial portion of GDP growth.
● Sectoral Impact: Industries like railways, energy, and infrastructure drive economic activities and employment generation, contributing directly to GDP expansion.
The future of government stocks in India appears promising, driven by several factors:
Infrastructure Development: With the Union Budget 2025-26 allocating ₹11.21 trillion for infrastructure projects, government stocks in sectors like construction and energy are expected to thrive.
Green Initiatives: The government's strong focus on renewable energy and sustainability will likely boost stocks in the clean energy sector, creating new investment opportunities.
Technological Advancements: Increased investments in digital infrastructure will benefit tech-related public sector undertakings (PSUs), enhancing their growth potential.
Investors can leverage tools like a brokerage calculator to assess potential returns from these stocks as they navigate this evolving landscape.
Investing in government stocks now presents several advantages:
Market Positioning: Many government stocks are currently undervalued, providing an opportunity for significant capital appreciation as the economy recovers.
Stable Dividends: Government companies are known for their consistent dividend payouts, making them attractive for income-focused investors.
Policy Support: The government's commitment to economic growth and infrastructure development ensures that government-backed companies will continue to receive support.
For those looking to invest, opening a demat account is essential to facilitate transactions and manage investments effectively.
In conclusion, government stocks represent a stable and—to many investors, attractive—investment avenue in the current economic climate. With substantial government backing, a focus on infrastructure, and a push towards sustainability, these stocks are well-positioned for growth.
Investors should consider their risk tolerance and investment goals when exploring these opportunities. Utilizing tools like a trading account can streamline the investment process, allowing for efficient management of portfolios. As we look ahead, the combination of favorable government policies and economic recovery makes investing in government stocks a choice worth considering for both conservative and growth-oriented investors.
Beyond the ones already discussed here, several other government sector companies attract notable investor attention due to their market presence and strategic importance:
Bharat Electronics Ltd (BEL) – A key defence PSU engaged in aerospace and defence electronics.
Hindustan Aeronautics Ltd (HAL) – A government-owned aerospace and aviation company.
GAIL (India) Ltd – India’s largest state-owned natural gas processing and distribution company.
NMDC Ltd – A public sector mining company focused on iron ore extraction.
IRCTC Ltd – A subsidiary of Indian Railways providing online ticketing, catering, and tourism services.
To invest in these stocks, investors must first open a trading account and link it with a demat account for holding securities electronically. Some of these PSUs may be part of an upcoming IPO, especially during disinvestment cycles.
Those using MTF to take leveraged positions in these government stocks should assess risk and exposure beforehand. Cost planning through a brokerage calculator is useful when placing frequent or high-volume trades, particularly in strategies such as intraday trading, where price movements are time-sensitive.
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Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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You can invest in government sector stocks by opening a trading account and demat account with a SEBI-registered broker. Once set up, you can purchase shares listed on the NSE or BSE. Track public offers, including any upcoming IPO from state-run companies.
Investors seeking relatively stable dividends and long-term value may consider government sector stocks. These are often preferred by conservative investors with a lower risk appetite. Evaluate them through your trading account using a brokerage calculator before committing capital.
Several listed companies operate within or partner with government sectors—examples include firms in defence, railways, energy, and infrastructure. Investors can track announcements or partnerships disclosed via stock exchanges, and use their demat account to hold shares securely.
India’s government sector is undergoing reforms aimed at improved efficiency, digital infrastructure, and partial disinvestment. This makes it crucial for investors to track related announcements, upcoming IPO opportunities, and regulatory changes through verified channels before using MTF or entering intraday trading.
Government stocks tend to offer stability, backed by state ownership, but they are not risk-free. Evaluate them carefully using a brokerage calculator and avoid speculative strategies such as intraday trading unless well-informed. Diversify your demat account holdings to mitigate sectoral concentration.
Evaluate regulatory support, dividend history, fiscal dependence, and sector performance. Consider liquidity for intraday trading and whether MTF is available. Use a brokerage calculator to assess costs, and maintain updated positions through your trading account and demat account for easy access.
It depends on your goals. Government sector stocks may offer stability and dividends, especially for long-term holders. Use a brokerage calculator to estimate transaction costs. Active traders using MTF or intraday trading should assess market trends and volumes through their trading account.
Government stocks play a vital role in economic stability and policy execution. Investors with a demat account can participate in national growth. These stocks often appear in an upcoming IPO pipeline, allowing wider retail access through a regulated trading account infrastructure.
Value them based on consistent earnings, dividend yield, and government support. Analyze operational efficiency and sectoral growth trends. Use a brokerage calculator to understand cost implications before using MTF or entering intraday trading via your trading account for faster execution.
Timing depends on fiscal policy, sector performance, and market volatility. Watch for upcoming IPO announcements and use a brokerage calculator to compare charges. Long-term investors can build positions through a demat account, while short-term traders may use MTF cautiously.
Yes, especially through dividends and capital appreciation over time. Use your trading account to track entry points and manage risk using a brokerage calculator. MTF or intraday trading may offer returns, but only if used with discipline and adequate market understanding.
The government supports trade through policy frameworks, public infrastructure, and regulatory oversight. Government sector companies often enable logistics, energy, and exports. Traders may follow relevant stocks using a trading account and consider intraday trading if market liquidity conditions are favourable.
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading
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