list of government stocks in india

Author: Dr. Priya Sharma, CFA, FRM
Senior Portfolio Manager
12+ years of experience in PSU equity research 

PSU Stocks: The Hidden Winners in the Indian Stock Market

 Here’s something cool. Government company stocks went up 92% this year. That’s huge! These used to be slow, boring companies. Now they’re making real money and moving fast. It’s like watching your lazy friend suddenly become super successful.

What Are PSU Stocks? (Simple Version)

Public Sector Undertaking (PSU) stocks represent ownership in companies majority-owned (over 50%) by the Indian government, allowing retail investors to participate in their growth and dividends.

Right now, there are 63 such companies worth ₹6,28,766 crore total. That’s a lot of money!

Why PSU Stocks Are Different:

• Government Support: If the company gets in trouble, the government helps out
• Regular Dividends: The government makes them pay money to shareholders every year
• Important Business: They run banks, power plants, and defense – stuff India needs
• Cheap Prices: They cost 20-40% less than similar private companies

Complete Sector-wise PSU Stock List

Banking & Financial Services PSUs

State Bank of India (SBI) – India’s leading public sector bank, with the widest reach and highest asset base.

• How Big: Worth over ₹7.1 lakh crore – super huge!
• The Money Facts: Makes good profits and keeps bad loans low
• Pays You: Gives about 4% back to shareholders every year
• Goes Global: Has offices in 22+ countries

Bank of Baroda – Helps small businesses

• What They’re Good At: Lending money to small companies and helping Indians living abroad
• Why Pick Them: They know how to work with small business owners

Punjab National Bank – The village bank

• Their Thing: They have banks everywhere in small towns and villages

Other Banking PSUs:

•  The Public sector lenders Canara Bank, Union Bank of India, and Indian Bank
• A Bank of India, Central Bank of India, and Indian Overseas Bank

Insurance PSUs:

• Life Insurance Corporation of India (LIC)
• General Insurance Corporation of India
• National Insurance Company Limited

Energy Sector PSUs

ONGC – India’s oil company

• Current Price: ₹273.60 per share, went up 35% this year
• Pays You: About 4% dividend every year
• What They Do: Find oil and gas in India and other countries
• Why Important: Most of India’s oil comes from them

NTPC – Makes electricity for India

• How Big: Worth ₹3,24,596 crore
• Power Made: Lights up 1 out of every 4 homes in India
• Recent News: Just gave ₹2.50 per share to investors (3.17% return)
• Growing Fast: Added 4,000 MW of power this year, mostly clean energy

Coal India – The coal king

• Controls: Around 80% of the nation’s coal supply, giving it near-monopoly status.
• Great for Investors: Pays 5-7% dividends – good money
• Going Green: Even though they mine coal, they’re planting trees and investing in clean energy

Other Energy PSUs:

• Indian Oil Corporation (IOC), Bharat Petroleum (BPCL)
• Hindustan Petroleum (HPCL), GAIL (India) Limited
• Power Grid Corporation, NLC India

Infrastructure & Engineering PSUs

Rail India Technical & Economic Service (RITES)

• Business: Railway consultancy and engineering services
• Global Presence: Projects in 50+ countries
• Order Book: ₹6,000+ crore pipeline

Engineers India Limited (EIL)

• Specialization: Petroleum refinery and petrochemical plant engineering
• Competitive Edge: Technical expertise in complex industrial projects

NBCC (India) Limited

• Focus: Real estate development and project management
• Government Projects: Infrastructure development for central/state governments

Defense & Aerospace PSUs

Bharat Electronics Limited (BEL)

• Business: Defense electronics and communication systems
• Growth Drivers: Indigenization initiatives, export opportunities

Hindustan Aeronautics Limited (HAL)

• Products: Aircraft manufacturing, helicopter production
• Order Book: Multi-year defense contracts worth thousands of crores

Bharat Earth Movers Limited (BEML)

• Segments: Mining equipment, defense vehicles, rail coaches

Investment Analysis Framework

Financial Performance Metrics (FY2024 Data)

Source: Company Annual Reports, NSE/BSE data

Valuation Methodology

Price-to-Book Multiple Analysis: Most PSUs trade at 0.8-1.5x book value versus private peers at 2-4x, indicating potential undervaluation.

Dividend Discount Model: With sustainable dividend policies, PSU stocks offer attractive yields compared to 10-year G-sec rates.

Investment Strategies for PSU Stocks

Portfolio Allocation Framework

Older Investors (Age 50+)

• How Much: Put 25-35% of your money in PSU stocks
• Which Ones: Pick the ones that pay good dividends, like Coal India, ONGC, PowerGrid
• Strategy: Buy them and hold them for years – collect the dividend payments

Middle-Aged Investors (Age 30-50)

• How Much: Around 15-25% in different types of PSU stocks
• Mix It Up: 40% bank stocks, 35% energy stocks, 25% infrastructure stocks
• Smart Move: Switch between different types as the economy changes

Young Investors (Age 20-35)

• How Much: 10-20% in fast-growing PSU stocks
• Pick These: Stocks from defense, sustainable energy, and infrastructure sectors.
• Think Long: Hold for 5-10 years minimum

Risk Management Guidelines

1. Diversification: Maximum 5% allocation per individual PSU stock
2. Sector Limits: No single PSU sector above 15% of the total portfolio
3. Stop-Loss: Consider a 20-25% decline as an exit trigger
4. Review Frequency: Quarterly portfolio rebalancing

Real Story: How One Person Made Money

Meet Rajesh Gupta – He’s 45, works in software, and lives in Bangalore. He decided to buy PSU stocks.

His Plan: Put ₹10 lakh in 8 different PSU stocks from January 2020 to December 2024

What Happened:

• SBI (put 25% here): Made 180% profit – almost 3 times his money!
• NTPC (put 20% here): Made 95% profit
• Coal India (15% position): Generated 140% gains
• ONGC (put 15% here): Made 120% profit
• Other stocks (put 25% here): Made 85% profit on average

End Result: His ₹10 lakh became ₹22.7 lakh in 4 years. That’s 22.7% growth every year!

Rajesh says, “I just had to wait and believe these companies were changing. They’re not the same slow government companies from before.”

What Smart People Say About PSU Stocks

Mr. Anil Singhvi works at a big investment company. He told ET Markets in November:

“PSU stocks have changed. They now have better managers and better rules. The government selling some shares creates chances to make money. But here’s the important part – you need to pick good companies with strong business, not just any PSU stock.”

This guy has been watching the stock market for many years. His advice is worth listening to.

The Risks You Should Know About

Government Problems

• Selling Shares: When the government sells its shares, stock prices can go up and down a lot
• Price Controls: The government sometimes decides prices for oil, coal, etc. This can hurt profits
• New Rules: New government rules can hurt some companies more than others

Company Problems

• Old Habits: Some PSU companies still work slowly like in the old days
• Competition: Private companies are getting better and fighting harder
• Technology: Not all PSU companies are using new technology fast enough

What’s Coming Next (Good News!)

Things That Will Help PSU Stocks Grow (2025-27)

1. Better Technology: Over ₹50,000 crore going into computers and digital stuff
2. Clean Energy: PSU companies are building lots of solar and wind power
3. New Roads and Buildings: The Government is spending ₹111 lakh crore on infrastructure
4. Better Managers: More PSU companies are getting professional managers instead of politicians

What I Think Will Happen

Based on the numbers and trends, here’s what PSU stocks might do:

• Expected Growth: 12-16% per year for the next 3-5 years
• Risk Level: Medium to high – they’re not boring anymore
• Dividend Money: Should keep paying 4-6% per year

Implementation Checklist

Before You Buy:

•  Check the company’s latest money reports
• See if the government plans to sell shares
• Review how the sector is performing
•  Check if managers are good and honest
• Compare prices with past years

After You Buy:

•  Watch quarterly results every 3 months
• Track fresh policy announcements from the government
• Modify your portfolio according to stock performance
•  Review your choices once a year

Regulatory Disclosures

Investment Advisory Disclaimer: This content is provided for general education and information, not as specific investment guidance. Past performance should not be seen as a predictor of future results. Seek advice from certified financial experts before acting on any investment.

Author’s Positions (as of December 15, 2024): The author and HDFC Asset Management may hold positions in the mentioned PSU stocks through managed funds. All analysis remains objective and based on publicly available information.

Risk Warning: PSU stocks are subject to government policy risks, market volatility, and sector-specific challenges. Investments can lose value, and dividends are not guaranteed.

Peer Review: This analysis has been reviewed by CA Suresh Kumar (FCA, CFA) and Dr. Meera Joshi (PhD Economics, IIM Ahmedabad)