BAJAJ BROKING
April 05, 2025
16 mins read
Public Sector Undertakings (PSUs) are companies in which the majority stake is held by the Government of India or state governments, typically at least 51%. These entities play a pivotal role in the nation's economic development, operating across various sectors such as energy, banking, and manufacturing. Investing in PSU stocks offers investors an opportunity to participate in the growth of these government-backed enterprises.
The shares of companies which the government controls through its majority ownership constitute PSU stocks. The government created these entities to benefit public interests through their control of essential industries critical for national infrastructure development and economic stability. The ownership of PSU stocks enables individuals to acquire shares of government-controlled enterprises which might yield financial gains through company success.
Indian PSU operations organize into different segments which depend on government ownership percentages and financial success criteria.
The most recognized public sector companies which are known for their size and financial strength belong to the Maharatna PSU category. These companies operate with substantial independence because they receive permission to conduct business growth and funding initiatives from the government on a rare basis.
Navratna PSUs maintain financial and operational freedom which falls behind the levels provided to Maharatna companies. The public sector companies Bharat Electronics Limited (BEL) and Hindustan Aeronautics Limited (HAL) represent exemplary examples of Navratna PSUs.
The Miniratna PSUs consist of smaller organizations while possessing independent authority yet facing tight governmental monitoring. The two classification categories of Category I and II determine how profitable and efficient these entities operate within their sectors.
Investment in PSU stocks carries several unique features as follows:
PSUs maintain steady financial performance because they operate in markets that are either monopolistic or less competitive.
Many PSUs maintain a dividend distribution scheme which supports regular attractive cash distributions to their shareholders.
The support of the government backing PSUs provides security that reduces the potential for bankruptcy.
The market liquidity conditions of large PSU stocks enable investors to execute trades smoothly because these stocks demonstrate high levels of buying and selling ease.
The following table displays India's highest market capitalization PSU stocks arranged in descending order. The companies operate throughout essential sectors which include banking, insurance, power generation and oil & gas industries.
Company Name | Last Price (₹) | % Change | 52-Week High (₹) | 52-Week Low (₹) | Market Cap (₹ crore) | Sector |
753 | 0.51% | 912.10 | 679.65 | 6,72,023.89 | Bank – Public | |
791.3 | 1.52% | 1,221.50 | 715.35 | 5,00,497.07 | Life & Health Insurance | |
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 | |
283.9 | 1.41% | 366.20 | 247.50 | 2,64,044.14 | Power Generation/Distribution |
Source: MoneyControl as of March 23, 2025.
The following table offers a concise overview of five major PSU companies, ranked by their market capitalisation:
Company | Market Cap (₹ cr) | Sector |
SBI | 6,72,023.89 | Public Sector Banking |
LIC India | 5,00,497.07 | Life & Health Insurance |
NTPC | 3,40,498.43 | Power Generation/Distribution |
ONGC | 3,05,134.67 | Oil & Gas Exploration |
Power Grid Corp | 2,64,044.14 | Power Generation/Distribution |
Source: MoneyControl
State Bank of India (SBI)
State Bank of India (SBI) is India’s largest public sector bank, offering a broad range of services across retail banking, corporate banking, treasury, and more. With a rich legacy and a vast branch network, SBI plays a central role in India’s financial system.
Key Financial and Market Metrics of SBI
Metric | Value |
Market Cap (₹ Cr) | 6,72,202 |
TTM EPS (₹) | 88.91 |
TTM PE | 8.47 (Low PE) |
Price-to-Book (P/B) | 1.40 |
Dividend Yield (%) | 1.82 |
ROE (%) | 17.31 |
52-Week High/Low (₹) | 912 / 680 |
This table with data outlines SBI's financial position, profitability metrics, and valuation multiples—relevant for investors comparing PSU banks.
Life Insurance Corporation of India (LIC)
LIC maintains its position as the leading life insurance provider in India with the primary market share of domestic life insurance. LIC maintains its favourable financial strength while its market value remains stable despite promoter ownership being above 90 percent.
LIC India – Financial and Market Overview
Metric | Value |
Market Cap (₹ Cr) | 5,00,528 |
TTM EPS (₹) | 67.83 |
TTM PE | 11.67 (Low PE) |
Price-to-Book (P/B) | 5.19 |
ROE (%) | 49.64 |
52-Week High/Low (₹) | 1,222 / 715 |
Dividend Yield (%) | 1.26 |
This table draws information to present LIC’s financial performance statistics along with market valuation information and capital structure metrics for investors focused on the insurance sector.
NTPC Ltd
As the biggest power generating company in India NTPC operates through thermal power generation along with hydroelectric and renewable projects. The company operates coal mining ventures combined with consultancy and energy trading business activities. NTPC’s strong fundamentals and steady earnings support long-term interest.
NTPC Ltd – Financial and Market Summary
Metric | Value |
Market Cap (₹ Cr) | 3,40,643 |
TTM EPS (₹) | 22.67 |
TTM PE | 15.50 |
Price-to-Book (P/B) | 2.02 |
Dividend Yield (%) | 2.21 |
ROE (%) | 12.95 |
52-Week High/Low (₹) | 448 / 293 |
This data provides the breakdown of NTPC earnings and return ratios for evaluating power sector public sector unit valuations in this table.
Power Grid Corporation of India Ltd
Power Grid is India’s central transmission utility, facilitating bulk power transmission across the country. It has implemented several national grid projects and is a critical component in India’s power infrastructure ecosystem.
Power Grid Corporation – Financial Snapshot
Metric | Value |
Market Cap (₹ Cr) | 2,63,300 |
TTM EPS (₹) | 16.71 |
TTM PE | 16.94 |
Price-to-Book (P/B) | 2.87 |
Dividend Yield (%) | 3.97 |
ROE (%) | 17.87 |
52-Week High/Low (₹) | 366 / 247 |
The table shows Power Grid’s financial health through revenue and profitability metrics which demonstrates stability in its operating strategy and financial movement.
Oil and Natural Gas Corporation (ONGC)
Indian oil company ONGC functions as a leading entity in the field of oil and gas exploration and production operations. As well as operating across Indian territory ONGC Videsh oversees international operations and the company runs its refining services through its subsidiary MRPL. The energy sector in India recognises this entity as a fundamental business investment.
ONGC Ltd – Key Financials & Valuations
Metric | Value |
Market Cap (₹ Cr) | 3,04,971 |
TTM EPS (₹) | 30.95 |
TTM PE | 7.83 |
Price-to-Book (P/B) | 0.87 |
Dividend Yield (%) | 5.05 |
ROE (%) | 14.60 |
52-Week High/Low (₹) | 345 / 215 |
This table encapsulates ONGC’s core profitability and valuation metrics relevant for investors tracking oil & gas PSUs.
Investing in Public Sector Undertakings (PSUs) requires careful evaluation of various factors to make informed decisions:
Government regulations along with pronouncements affect the operations and profitability levels of PSUs to a significant degree. Changes in official policies produce both direct and adverse outcomes for operations and profitability of PSUs.
Financial Health: Assessing the company's financial statements, including revenue, profit margins, and debt levels, is crucial to determine its stability and growth potential.
Sector Performance: The performance of a PSU depends on how well its operating sector performs in the market. Affiliations with the energy market often lead PSUs to experience direct impacts from global petroleum price adjustments.
Dividend History: Many investors are attracted to PSUs due to their regular dividend payouts. Reviewing the dividend track record can provide insights into potential income streams.
Market Conditions: Understanding current market trends and investor sentiment towards PSUs can influence investment decisions.
Several elements can affect the performance of PSU stocks:
Economic Indicators: Inflation rates, GDP growth, and other macroeconomic factors can impact PSU profitability.
Global Market Trends: International economic conditions and geopolitical events can influence the demand and pricing for PSU products and services.
Operational Efficiency: The ability of a PSU to manage resources effectively and adapt to market changes plays a role in its success.
Government Initiatives: Policies such as divestment strategies and infrastructure projects can create opportunities or challenges for PSUs.
PSU stocks represent ownership in government-majority-owned companies. Here's an overview of their functioning:
Ownership Structure: The government holds at least 51% of the equity in PSUs, ensuring control over strategic decisions.
Listing and Trading: Many PSUs are publicly listed on stock exchanges, allowing investors to buy and sell shares through a trading account.
Dividend Distribution: PSUs often distribute a portion of their profits as dividends, providing regular income to shareholders.
Consider the following strategies when investing in PSUs:
Diversify Investments: Spread investments across various sectors to mitigate risks associated with any single industry.
Stay Informed: Keep abreast of government policies, economic indicators, and sector-specific news that may impact PSU performance.
Long-Term Perspective: PSUs may offer stable returns over time; adopting a long-term investment horizon can be beneficial.
Utilize Tools: Employ resources like a brokerage calculator to estimate transaction costs and potential returns accurately.
Selecting the right PSU stocks involves:
Evaluating Financial Metrics: Analyze key indicators such as Earnings Per Share (EPS), Price-to-Earnings (P/E) ratio, and debt-to-equity ratio to assess financial health.
Assessing Management Efficiency: Effective leadership can drive PSUs towards better performance and profitability.
Considering Market Position: PSUs with a dominant market share in their respective industries may offer more stability and growth potential.
Investors who might consider PSU stocks include:
Risk-Averse Individuals: Those seeking stable returns with lower risk may find PSUs appealing due to government backing.
Income-Focused Investors: Individuals looking for regular income streams might be attracted to the consistent dividend payouts of PSUs.
Long-Term Investors: Those with a long-term investment horizon aiming for steady growth and capital preservation may benefit from including PSUs in their portfolios.
Incorporating PSU stocks into an investment strategy requires careful consideration of individual financial goals, risk tolerance, and market conditions.
Investing in Public Sector Undertakings (PSUs) offers several potential benefits:
Government Backing: PSUs are majority-owned by the government, providing a layer of security and reducing the risk of default.
Stable Returns: These companies often operate in essential sectors, leading to consistent performance and stable returns.
Regular Dividends: Many PSUs have a history of paying regular dividends, offering investors a steady income stream.
Attractive Valuations: PSU stocks often trade at lower valuations compared to private counterparts, potentially offering higher returns if their fundamentals improve.
Deciding to invest in PSU stocks depends on individual financial goals and risk tolerance:
Risk-Averse Investors: Those seeking stable returns with lower risk may find PSUs appealing due to government backing.
Income-Focused Individuals: Investors looking for regular income might be attracted to the consistent dividend payouts of PSUs.
Long-Term Perspective: PSUs may offer stable returns over time; adopting a long-term investment horizon can be beneficial.
However, it's essential to conduct thorough research and consider individual financial goals before investing in PSU stocks.
Investing in PSU stocks carries certain risks:
Policy Influence: PSUs are affected by government policies and decisions, which can influence their performance and growth potential.
Growth Pace: PSUs often experience slower growth than private firms, largely due to bureaucratic challenges and government oversight.
Restricted Liquidity: Certain PSUs have limited free-float shares, which can reduce liquidity and affect price dynamics.
Sector Focus: The PSU index tends to be heavily weighted toward sectors like energy and banking, resulting in less variety across industries.
Investing in PSU stocks offers several advantages:
Government Support: Being government-backed, PSUs enjoy a level of security and support, reducing the risk of bankruptcy.
Regular Dividends: Many PSUs have a track record of paying regular and attractive dividends, offering a steady income stream to investors.
Market Liquidity: Large PSU stocks typically have high liquidity, allowing investors to buy and sell shares with ease.
Appealing Valuations: Relative to private companies, certain PSUs are priced at lower valuations, which could lead to greater returns if their underlying fundamentals strengthen.
Incorporating PSU stocks into an investment strategy requires careful consideration of individual financial goals, risk tolerance, and market conditions.
PSU stocks are accessible to a broad category of investors through a demat account, which is mandatory for holding equity shares in India.
Investor categories eligible to invest in PSU stocks include:
Retail investors: Individuals with a valid trading account and demat account can invest through stock exchanges.
Institutional investors: Mutual funds, insurance companies, and pension funds often hold PSU stocks as part of their long-term portfolios.
NRIs: Non-Resident Indians can invest in PSU stocks via Portfolio Investment Schemes (PIS) subject to regulatory compliance.
HUFs and Trusts: Eligible entities registered with SEBI can participate in PSU equity offerings.
While PSU stocks offer stability, they are not risk-free. Key risks include:
Risk Factor | Description |
Policy-Driven Volatility | PSU stocks are closely tied to government policy changes, which can cause unexpected price movements. |
Bureaucratic Inefficiencies | Decision-making delays and operational inefficiencies may hinder competitiveness. |
Cyclical Exposure | Many PSUs operate in cyclical sectors like energy or infrastructure, increasing exposure to macroeconomic conditions. |
Low Retail Participation | Some PSU stocks may have low liquidity due to limited public float. |
MTF (Margin Trading Facility) investors should be cautious with PSU stocks, as leveraging can amplify both gains and losses when stock prices swing due to policy announcements.
Investing in PSU stocks in India requires a few basic steps:
1. Open a Demat and Trading Account
These accounts are required to hold and trade shares of any publicly listed PSU.
2. Use a Brokerage Calculator
Before placing a trade, it’s advisable to use a brokerage calculator to understand the cost implications of buying or selling PSU stocks, especially in intraday trading.
3. Track Upcoming IPO Listings
Many new PSU disinvestments take place through IPOs. Keeping an eye on any upcoming IPO announcements helps investors participate early.
4. Use Research Tools
Analyse financials, dividend yields, and recent news via SEBI-recognized portals before committing capital.
5. Place Your Order
Orders can be placed via trading platforms using your trading account, either as delivery-based investments or for short-term strategies like intraday trading.
Government policies significantly influence Public Sector Undertakings (PSUs) in India, affecting their operations, profitability, and stock performance. Key policy impacts include:
Regulatory Reforms: The Union Budget 2025-2026 introduced a High-Level Committee for Regulatory Reforms to review non-financial sector regulations, certifications, licenses, and permissions. This initiative aims to streamline operations for PSUs, potentially enhancing efficiency and profitability.
Financial Sector Initiatives: Policies such as the development of a 'Grameen Credit Score' by Public Sector Banks are designed to serve the credit needs of Self-Help Group (SHG) members and rural populations. Such measures can expand the customer base and revenue streams for PSUs in the banking sector.
Investment in Infrastructure: Government emphasis on infrastructure development often leads to increased contracts and projects for PSUs in sectors like construction, energy, and transportation, thereby boosting their financial performance.
PSU stocks often exhibit resilience during economic downturns due to several factors:
Essential Services: Many PSUs operate in sectors such as utilities, energy, and banking, which provide essential services with consistent demand, even during economic slowdowns.
Government Support: The backing of the government can provide stability, as PSUs may receive policy support, subsidies, or financial assistance during challenging economic periods.
Dividend Yields: PSUs are known for regular dividend payouts, offering investors a steady income stream, which can be particularly attractive during times of economic uncertainty.
The Union Budget 2025-2026 introduced several measures impacting the PSU sector:
Record Dividends: Central PSUs are projected to pay record dividends totaling ₹1.3-1.4 lakh crore during the current financial year, benefiting both the government and retail investors.
Disinvestment Targets: The government set a disinvestment target of ₹47,000 crore for 2025-2026, indicating a continued focus on privatization and improved efficiency within the PSU sector.
Support for MSMEs: Revisions in classification criteria for Micro, Small, and Medium Enterprises (MSMEs) and the introduction of credit cards for micro enterprises aim to bolster this sector, indirectly benefiting PSUs involved in financing and supporting MSMEs.
Investing in PSU stocks presents several future opportunities:
Defense Sector Growth: With a focus on indigenous defense production, PSUs like Hindustan Aeronautics Limited (HAL) are experiencing increased investments and order books, aligning with the government's push for self-reliance in defense.
Green Energy Initiatives: PSUs in the energy sector are expected to play a pivotal role in the transition to renewable energy, opening new investment avenues in sustainable projects.
Technological Upgradation: Investments in technology and digitalization within PSUs can lead to improved operational efficiencies and competitiveness, enhancing their appeal to investors.
Public Sector Undertakings (PSUs) play a significant role in India's economy:
National Income: The public sector contributes approximately 20% to India's national income, underscoring its substantial role in economic activities.
Employment: PSUs account for nearly 40% of total wages in the country, highlighting their importance in job creation and economic stability.
The future of Public Sector Undertakings (PSUs) in India appears promising, influenced by several key factors:
Strategic Reforms: Recent government initiatives aimed at enhancing operational efficiency and corporate governance have positioned PSUs for improved performance. These reforms are expected to bolster investor confidence and contribute to sustainable growth.
Sectoral Opportunities: PSUs operating in sectors such as defense and renewable energy are experiencing increased demand. For instance, defense PSUs have seen a surge in investments due to a focus on indigenous arms production, leading to strong order books and growth prospects.
Attractive Valuations: Following recent market corrections, many PSU stocks are trading at more reasonable valuations, offering potential for value investors seeking long-term growth.
Investing in PSU stocks currently presents several reasons:
Improved Fundamentals: PSUs have shown marked improvements in operational efficiency and financial management, enhancing their profitability and appeal to investors.
Regular Dividends: Many PSUs offer attractive dividend yields, providing investors with a steady income stream. For example, companies like Indian Oil Corporation Ltd (IOCL) and Coal India Ltd (CIL) are known for their high dividend payouts.
Government Support: As government-backed entities, PSUs benefit from policy support and initiatives aimed at fostering growth, adding a layer of stability to these investments.
Public Sector Undertakings (PSUs) continue to play a vital role in India's economic landscape, offering investors opportunities for stable returns and portfolio diversification. With ongoing reforms, sector-specific growth prospects, and supportive government policies, PSUs present a viable investment avenue. However, investors should conduct thorough research and consider individual financial goals and risk tolerance before investing in PSU stocks.
The following table presents a snapshot of ten well-known publicly listed Indian companies. These stocks are often tracked for their dividend yields, consistent earnings, or sectoral importance.
Company | CMP (₹) | P/E | Market Cap (₹ Cr) | Div. Yield (%) | Qtr Net Profit (₹ Cr) | Qtr Sales (₹ Cr) | ROCE (%) | 6M Return (%) |
216.70 | 5.48 | 1,12,011 | 3.51 | 5,249.74 | 32,569.84 | 6.33 | -7.98 | |
122.45 | 5.72 | 93,504 | 2.94 | 4,623.03 | 27,134.77 | 6.55 | -0.74 | |
93.10 | 6.36 | 1,06,952 | 1.61 | 4,811.02 | 31,894.80 | 5.46 | -14.09 | |
87.60 | 4.83 | 79,449 | 3.68 | 4,255.68 | 30,750.73 | 6.63 | -16.60 | |
942.40 | 5.65 | 13,445 | 3.06 | 593.66 | 1,236.87 | 18.51 | -23.00 | |
Gujarat State Fert. (GSFC) | 181.20 | 13.29 | 7,231 | 2.21 | 133.85 | 2,814.07 | 5.77 | -17.19 |
156.90 | 8.52 | 4,651 | 4.97 | 181.11 | 3,420.81 | 9.64 | -25.86 | |
112.70 | 5.93 | 3,526 | 1.11 | 151.44 | 1,671.05 | 7.52 | -5.68 | |
181.75 | 5.31 | 6,874 | 3.03 | 283.60 | 2,243.02 | 6.24 | -22.30 | |
24.08 | 5.06 | 6,308 | 1.25 | 341.87 | 2,370.74 | 6.19 | -2.04 |
This data sourced from Screener highlights essential valuation and performance metrics for selected Indian companies outside the top PSU basket. Investors may track these stocks for income generation, sector exposure, or long-term value appreciation.
Do you have a trading account app or demat account app?
You can open an account with Bajaj Broking in minutes.
Download the Bajaj Broking app now from Play Store or App Store.
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.
For All Disclaimers Click Here: https://www.bajajbroking.in/disclaimer
Share this article: 
No result found
To invest in PSU stocks, open a trading account and demat account with a SEBI-registered participant. These accounts allow you to buy PSU shares listed on the NSE or BSE and hold them securely for trading or long-term investing.
Investors seeking stable returns and dividend income may consider PSU sector stocks. A demat account is mandatory to hold shares, and conservative investors may prefer PSUs due to their government backing and presence in essential sectors.
Government-backed institutions, pension funds, and domestic mutual funds are key investors in PSU stocks. Individuals with a trading account also participate, especially during upcoming IPO offerings or public disinvestment announcements.
With increasing focus on infrastructure, clean energy, and strategic divestment, PSU firms may see capital inflow. Technology adoption and stable governance improve efficiency, creating long-term prospects for investors using tools like a brokerage calculator.
PSU stocks generally offer relative safety due to government ownership. Investors using MTF should remain cautious as leveraged exposure can amplify risks in case of policy changes or economic slowdowns affecting the sector.
Check dividend history, price-to-earnings ratio, and return on capital. Also use a brokerage calculator to understand transaction costs. Assess company fundamentals and government influence before investing through your trading account.
The PSU sector may suit long-term, risk-averse investors. Regular dividends and government support add value, though limited growth in some cases requires careful selection using tools like a brokerage calculator before any commitment.
PSU stocks are significant due to their contributions to infrastructure, banking, energy, and national development. They also attract investors seeking dividend income and long-term value via demat account holdings.
Valuation involves checking price-to-book, earnings consistency, and dividend yield. Investors trading through MTF must analyze volatility and capital efficiency. PSU valuation often factors in government policy impact.
With reforms, better financials, and upcoming IPO activity, PSU stocks are gaining attention. Use a trading account and assess risk appetite, sector outlook, and valuation before investing.
Yes, PSU stocks can generate profits through dividends and capital appreciation. Investors using intraday trading strategies must consider sector volatility, while long-term holders may benefit from gradual valuation improvements.
PSUs are critical in India’s trade through oil, power, and infrastructure exports. Some engage in global projects. Investors trading these via intraday trading or delivery often track commodity-linked PSUs.
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading
TRENDING CALCULATORS AND STOCKS ON BAJAJ BROKING
POPULAR STOCKS: Tata Motors Share Price Infosys Share Price IRFC Share Price SBI Card Share Price Cipla Share Price NBCC Share Price IDFC First Bank Share Price IRCTC Share Price PNB Share Price Zomato Share Price Vodafone Idea Share Price Axis Bank Share Price JSW Steel Share Price Bandhan Bank Share Price SBI Share Price Tata Steel Share Price ONGC Share Price Ashok Leyland Share Price Paytm Share Price Subex Share Price DLF Share Price Reliance Share Price HDFC Bank Share Price Suzlon Share Price IOC Share Price HUL Share Price Asian Paints Share Price Bank Of Baroda Share Price ITC Share Price TCS Share Price HFCL Share Price Icici Bank Share Price Tata Chemicals Share Price CDSI Share Price MRF Share Price Tata Power Share Price Adani Green share price BPCL Share Price Vedanta Share Price Dmart Share Price Hindalco Share Price LIC Share Price SAIL Share Price Adani Port Share Price IEX Share Price Nalco Share Price L&T Share Price Adani Power Share Price BHEL Share Price Bajaj Finance Share Price Canara Bank Share Price Indusind Bank Share Price Gail Share Price Yes Bank Share Price Wipro Share Price Happiest Minds Share Price Coal India Share Price Maruti Share Price Reliance Power Share Price
INDIAN INDICES: Nifty 50 Share Price SENSEX Share Price Nifty Next 50 Share Price BSE100 Share Price Nifty Bank Share Price LRGCAP Share Price Nifty 100 Share Price MIDCAP Share Price Nifty 200 Share Price SMLCAP Share Price Nifty 500 Share Price BSE500 Share Price Nifty Midcap 50 Share Price ALLCAP Share Price NIFTY SMLCAP 50 Share Price BSE200 Share Price India VIX Share Price BSEIPO Share Price
