list of government stocks in india

Editorial Team: One Touch Finance

What happened in 2024

If you’ve been watching PSU stocks this year, you saw something interesting. These government-owned company stocks gave investors about 20% returns in 2024. That’s after an amazing 55.3% jump in 2023. The BSE PSU Index hit its highest point at 22,801 in July 2024, then dropped a bit. Now it’s trading around 19,000-20,000 as we end the year.

Here’s what you should know:

• BSE PSU Index returned about 20% in 2024
• There are 63 PSU companies you can invest in
• Best performer: Cochin Shipyard went up 134%
• Current P/E ratio is around 12x (that’s 40% cheaper than Nifty)
• You can get 2.5-5% in dividends each year

What are PSU stocks anyway?

Let me explain this simply. PSU stands for Public Sector Undertaking. These are companies where the Indian government owns at least 51% of the shares. When you buy these stocks, you’re investing in businesses that the government runs.

You’ll find PSU companies in these important areas:

• Banks and financial services
• Oil and energy companies
• Power plants
• Defense and aircraft makers
• Railways and roads
• Mining and metals

The best performing PSU stocks you should watch

Defense and shipbuilding companies

1. Cochin Shipyard

This company was the star of 2024. If you bought shares at ₹677 in January, they were worth ₹1,582 by the end of the year. That’s a 134% return! The company is now worth ₹41,618 crore in total.

2. Rail Vikas Nigam

This railway builder went up 125% in 2024. They’re making money from India’s big push to improve railways.

3. Mazagon Dock Shipbuilders

If you like naval defense, this company builds submarines and warships for India. Their stock doubled in 2024 with a 99% return.

4. Hindustan Aeronautics Limited (HAL)

HAL makes aircraft for India’s air force. Here’s what makes them interesting:

• The company is worth ₹3.26 lakh crore
• They have ₹94,000 crore worth of orders lined up for the future
• In 2024, their stock went up 17%
• Over 5 years, investors made 1,257% returns (yes, you read that right)
• They build Tejas fighter jets and maintain Su-30 MKI engines
• Last year they paid ₹40 per share as dividend

5. Bharat Electronics Limited (BEL)

BEL makes radar systems, communication equipment, and electronic warfare gear. The military needs this stuff badly.

• Worth over ₹3 lakh crore now
• Stock went up 41% in 2024
• They have ₹71,650 crore in orders waiting
• Made ₹23,000 crore in revenue this year (16% more than last year)
• 5-year return: 1,237%
• Dividend yield: 0.58%

Banks and financial companies

1. State Bank of India (SBI)

SBI is India’s biggest bank. Everyone knows them. Here’s why investors like them:

• The bank crossed ₹8 trillion in value in June 2024
• They made ₹70,901 crore profit this year (that’s a lot!)
• They’re growing loans by 15.2% each year
• They have offices in over 22 countries
• In India, they run 22,219 branches and 62,617 ATMs
• They control about 23% of all bank deposits in India
• Last year they gave ₹11.30 per share as dividend
• You get about 1.48% dividend yield

2. Bank of Baroda

This bank is really good at helping small businesses. They also have a strong presence, helping Indians who live abroad.

3. Punjab National Bank

What makes PNB special? They have banks in small towns and villages where other banks don’t bother going.

4. Union Bank of India

Let me show you their recent numbers from Q2 FY25:

• Operating profit: ₹81.1 billion (up 12.4% from last year)
• Net profit: ₹47.2 billion (up 48.8% – almost doubled!)
• Their bad loans dropped from 7.7% to 4.76%
• P/E ratio is just 5.93 (industry average is 9.21)
• Price to book value: 0.89 (industry is 1.38)
• They keep 17.1% capital as a safety buffer

5. Life Insurance Corporation (LIC)

LIC is the biggest life insurance company in India. Period.

• Made ₹48,151 crore profit this full year
• In just Q4, they made ₹19,013 crore (38% more than last year)
• They were India’s most profitable PSU in the last quarter
• They control 66.2% of all new insurance sold in India
• Gave ₹12 per share as final dividend

Energy and power companies

1. NTPC Limited

NTPC generates electricity for India. One in every four homes in India uses power that it creates.

• Worth ₹3,24,596 crore
• They can produce 75,958 MW of power (that’s 17.37% of India’s total)
• Made record profit of ₹21,330 crore in FY24
• Generated 422 billion units of electricity (up from 399 billion)
• Over one year, investors made 90% returns
• Recently paid ₹2.50 per share as an interim dividend
• Planning to add 60 GW of renewable energy by 2032

2. Oil & Natural Gas Corporation (ONGC)

ONGC finds and produces oil and gas for India. Most of India’s oil comes from them.

• Trading at ₹273.60 per share
• Went up 35% in 2024
• Over one year, up 68%
• Made ₹40,520 crore profit in FY24 (record high)
• They produce 71% of all of India’s domestic oil and gas
• You get about 4% dividend yield
• Paid ₹9.75 per share last year
• Operating in 8 out of 9 oil-producing areas in India

3. Coal India Limited

Coal India is massive. They dig up about 80% of all the coal India uses.

• Worth ₹2.36-2.42 lakh crore
• Produced record 703.9 million tonnes in FY24
• Made ₹37,370 crore profit (up from ₹28,130 crore)
• By May 2024, investors had made 100% returns in one year
• In 2024, the stock went up 22%
• Dividend yield is great at 5-7%
• They’re going green too – targeting 5 GW of renewable energy soon

4. Power Grid Corporation

This company runs the power transmission lines across India.

• Paid ₹8.50 per share dividend last year
• Gives about 3% dividend yield
• Currently trading at ₹295.25 per share

5. Indian Oil Corporation (IOC)

IOC refines crude oil and runs petrol pumps across India.

• Paid ₹12 per share dividend
• Offers 7.5% dividend yield (highest among major PSUs!)

6. Bharat Petroleum and Hindustan Petroleum

Both companies refine oil and sell petroleum products. They’re similar businesses with good dividend track records.

How much are these stocks really worth?

BSE PSU Index numbers

• 2024 returns: about 20%
• 2023 returns: 55.3%
• Highest point in 2024: 22,801 (hit in July)
• Current range: 19,000-20,000
• Drop from peak: about 18%

Comparing PSU stocks to private companies

Different sectors compared (2024)

Why these stocks might do well

What the government is doing

1. Atma Nirbhar Bharat: India wants to make more things at home, especially weapons
2. Building India: The government is spending ₹111 lakh crore on roads, ports, and railways
3. Defense upgrades: The Military is buying lots of new equipment
4. Selling shares smartly: The Government is trying to get better prices when selling PSU shares
5. Better pay for managers: Now PSU bosses earn more if the stock does well

What’s helping each sector

Defense companies:

• Government approved ₹1.4 lakh crore worth of defense purchases in 2024
• 99% of equipment must be made in India
• Indian defense companies can now export weapons
• India wants a $200 billion defense budget by 2030

Energy companies:

• NTPC adding 60 GW of solar and wind power
• Coal India is going carbon neutral
• More natural gas pipelines are being built

Banks:

• Bad loans are decreasing
• Banks are spending ₹50,000 crore on digital systems
• Opening more branches in villages

How you should invest based on your age

If you’re 50 or older

You probably want a steady income, right? Here’s what I’d suggest:

• Put 25-35% of your money in PSU stocks
• Focus on ones that pay high dividends
• Best picks for you: Coal India, ONGC, Power Grid, IOC
• Your strategy: Buy and hold them. Let the dividends keep coming every year

If you’re between 30 and 50

You want some growth but also safety. Try this:

• Put 15-25% of your money in PSU stocks
• Split it up like this:
  • 40% in banks (SBI, Bank of Baroda)
  • 35% in energy (NTPC, ONGC, Coal India)
  • 25% in infrastructure and defense
• Move money between sectors as the economy changes

If you’re between 20 and 35

You can take more risks and wait longer. Here’s my advice:

• Put 10-20% in PSU stocks
• Pick the fast-growing ones
• Best bets: Defense stocks (HAL, BEL) and renewable energy companies
• Your plan: Hold for 5-10 years minimum. Don’t panic when prices drop

What could go wrong

Problems with the companies themselves

1. Slow decision-making: Some PSUs still work like government offices (meaning slowly)
2. Manager quality varies: Some are great, others not so much
3. Technology lag: They’re slower than private companies to adopt new tech
4. More competition: Private companies are getting better and taking market share

Government and market risks

1. Government interference: Sometimes the government forces PSUs to keep prices low, which hurts profits
2. Stake sales: When the government sells shares, it can make prices swing wildly
3. Political changes: New governments might have different priorities
4. Rule changes: New regulations can hurt specific sectors
5. World events: Oil and coal prices go up and down based on global demand

Price risks

• Many stocks went up fast in 2023-24, so they corrected in 2024
• Some might be too expensive now
• Market sentiment changes quickly, especially for PSU stocks

What to expect going forward (2025-2027)

Growth outlook

• Risk level: Medium to high (these aren’t boring stocks anymore)
• Dividend yield: You can expect 4-6% from major PSUs
• Order books: Defense and infrastructure companies have lots of work lined up
• Valuation gap: PSU stocks are still 40% cheaper than Nifty, which could mean they have room to grow

What’s happening in each sector

Defense:

• Companies have enough orders for 3+ years
• Defense spending will grow 5-8% each year
• “Make in India” focus continues

Banking:

• Bad loans keep improving
• Digital banking is making banks more efficient
• Loans still growing at 15%+ per year

Energy:

• More solar and wind power coming
• Coal demand staying steady despite green push
• Oil and gas production is maintaining current levels

Checklist for you

Before you buy any PSU stock

• ✓ Read the latest quarterly results
• ✓ Check if the government plans to sell shares
• ✓ Look at their order book and future revenue
• ✓ Research the management team
• ✓ Compare current price to the past 5 years
• ✓ Check their dividend history

After you buy

• ✓ Check earnings every 3 months
• ✓ Watch for government policy news
• ✓ Review your portfolio every quarter
• ✓ Rebalance if needed
• ✓ Do a full review once a year.
• ✓ Consider selling if a stock drops 20-25%

What you need to remember

1. PSU stocks gave 20% returns in 2024 – not the crazy 92% you might have heard from fake sources
2. Defense and shipbuilding won big with some stocks doubling
3. They’re still cheaper than regular stocks by about 40%
4. Good dividend income at 4-7% for many PSUs
5. The government is helping with better policies
6. These aren’t boring anymore – they move more now, which means more risk
7. Don’t put too much in one stock – keep it under 5% of your money
8. Limit sector exposure – don’t let any one sector be more than 15% of your total

Important warnings

I’ve compiled this from public information that you can verify. Everything here is accurate as of November 2024. But remember – past performance doesn’t mean future success. PSU stocks can be risky:

• Prices can swing wildly
• Government policies can change
• Dividends aren’t guaranteed
• Each sector has its own risks

What you should do:

• Do your own homework
• Talk to a qualified financial advisor
• Only invest discretionary money you don’t rely on.
• Don’t commit everything to one strategy. 

Where did I get this information?

All data in this report comes from official sources you can verify yourself:

Company information:

• State Bank of India Annual Reports: https://bank.sbi/web/investor-relations/annual-reports
• NTPC Investor Relations: https://www.ntpc.co.in/investors
• Coal India Investor Page: https://www.coalindia.in/en-us/investor.aspx
• ONGC Financial Results: https://www.ongcindia.com/wps/wcm/connect/en/investor
• HAL Financial Statements: https://hal-india.co.in/Financial%20Statements/M__173
• BEL Investor Relations: https://bel-india.in/investors.aspx
• LIC Financial Reports: https://licindia.in/investor-relations

Market data:

• BSE PSU Index: https://www.bseindia.com/Indices/IndexArchiveData.html
• NSE Listed Companies: https://www.nseindia.com/
• Bombay Stock Exchange: https://www.bseindia.com/

News sources:

• Economic Times PSU Section: https://economictimes.indiatimes.com/markets/stocks/psu
• Business Standard: https://www.business-standard.com/markets/stock-market-news
• Business Today Markets: https://www.businesstoday.in/markets

Government sources:

• Ministry of Defence: https://www.mod.gov.in/
• Ministry of Petroleum: https://mopng.gov.in/
• DIPAM (Disinvestment): https://dipam.gov.in/

Report details:

• Compiled: November 2024
• Data verified: Multiple official sources cross-checked
• Update recommended: Review quarterly