What are PSU stocks?
- KKS
- Feb 14
- 4 min read
The full form of PSU is Public Sector Undertaking. These companies are also called PSE or Public Sector Enterprise. PSUs or PSEs are public companies that have government as the majority share holder. The government should have at least 51% share holding in a company to be called as PSU or PSE. If you are not aware of what shareholding in a company is, you can go through another article for which the link is given below.
When we say that government is having the majority shareholding, we mean that it can be either the central government or one of the state governments. The PSUs where central government has stake will be termed CPSUs (Central PSUs) or CPSEs (Central PSEs). Similarly, PSUs with sate government as the majority share holders are often termed as SPSUs( State PSUs) and SPSEs (State PSEs).
Various PSUs were established in past having different goals in mind. Some were started due to lack of industrial base after India's independence. To increase the industrial output India created PSUs like SAIL, NTPC etc. Some PSUs were created to keep control over important sectors like defence, aviation etc. Banks that have government as the majority shareholder are termed Public Sector Banks or PSBs. You can read about the history and motives behind the establishment of PSUs from other sources. The focus of this article is to emphasise on the importance of PSU stocks in terms of trading and investing.
Public sector companies are in focus for investors and traders because of the following reasons
Government influence: These companies are affected by the decisions taken by the various governments. Based on the change in government and the interest groups, the government might influence PSU policies. These policy changes do affect the outlook of the PSUs. Price fluctuation in PSU stocks can often be observed around key election events.
High Dividend stocks: PSUs and PSBs usually tend to give high dividends. Below you can see that some of the top dividend yields are from the PSU companies. Trading opportunities appear as dividends are announced. Traders try to catch the trend whenever such opportunities are available. Investors with dividends in mind try to invest in these stocks to get steady income.
High Yield stocks Privileged access: Being government owned entities, PSUs have advantage of having access to sectors like defence, space exploration, nuclear energy etc. This edge over private sector gives these PSU stocks more room to grow and hence PSU stocks are in demand.
Trust of the country: Indian investors have a lot of trust in companies that are owned by the government. The risk of default or bankruptcy is very low, and hence conservative investors are comfortable buying PSU stocks.
Availability of capital: Being owned by government, PSUs have little problem raising capital for expansion and R&D. This is a huge advantage over private sectors. This availability of capital makes it easy for PSUs to expand and innovate and take risks. This factor also increases the comfort in owning PSU stocks.
News based stocks: PSUs being controlled by government, gets effected from any development happening in geopolitics. This makes PSU stocks volatile around important news updates.
List of PSU stocks on NSE. This list might not be exhaustive so please cross check it with latest data.
Energy and Oil & Gas | Ticker | Market Capitalization |
Oil and Natural Gas Corporation (ONGC) | NSE:ONGC | 2,959,201,971,920.00 |
Indian Oil Corporation (IOC) | NSE:IOC | 1,696,265,706,542.00 |
GAIL (India) Ltd. | NSE:GAIL | 1,068,496,631,042.00 |
Bharat Petroleum Corporation Ltd. (BPCL) | NSE:BPCL | 552,480,611,699.00 |
Hindustan Petroleum Corporation Ltd. (HPCL) | NSE:HINDPETRO | 681,484,480,000.00 |
Power Grid Corporation of India Ltd. | NSE:POWERGRID | 2,410,602,199,985.00 |
NTPC Ltd. | NSE:NTPC | 2,975,470,283,130.00 |
Coal India Ltd. | NSE:COALINDIA | 2,227,323,717,870.00 |
NLC India Ltd. | NSE:NLCINDIA | 277,618,402,869.00 |
Oil India Ltd. | NSE:OIL | 671,053,970,868.00 |
Banking and Finance | ||
State Bank of India (SBI) | NSE:SBIN | 6,482,834,261,091.00 |
Punjab National Bank (PNB) | NSE:PNB | 1,087,468,888,031.00 |
Bank of Baroda (BoB) | NSE:BANKBARODA | 1,088,987,131,727.00 |
Canara Bank | NSE:CANBK | 804,473,836,088.00 |
Union Bank of India | NSE:UNIONBANK | 863,260,676,103.00 |
Indian Bank | NSE:INDIANB | 697,794,683,757.00 |
Bank of India | NSE:BANKINDIA | 459,964,355,341.00 |
Central Bank of India | NSE:CENTRALBK | 421,872,645,220.00 |
Bank of Maharashtra | NSE:MAHABANK | 378,342,585,345.00 |
UCO Bank | NSE:UCOBANK | 479,194,497,891.00 |
Punjab & Sind Bank | NSE:PSB | 302,303,682,906.00 |
IDBI Bank Ltd. | NSE:IDBI | 796,773,673,378.00 |
Defense and Engineering | ||
Bharat Electronics Ltd. (BEL) | NSE:BEL | 1,911,209,619,791.00 |
Hindustan Aeronautics Ltd. (HAL) | NSE:HAL | 2,449,010,307,973.00 |
Bharat Dynamics Ltd. (BDL) | NSE:BDL | 428,237,726,062.00 |
Mazagon Dock Shipbuilders Ltd. | NSE:MAZDOCK | 892,364,310,779.00 |
Garden Reach Shipbuilders & Engineers Ltd. | NSE:GRSE | 161,487,542,600.00 |
BEML Ltd. | NSE:BEML | 121,963,123,870.00 |
Mining and Minerals | ||
National Aluminium Company Ltd. (NALCO) | NSE:NATIONALUM | 351,586,623,845.00 |
Hindustan Copper Ltd. | NSE:HINDCOPPER | 218,305,690,575.00 |
MOIL Ltd. | NSE:MOIL | 61,717,028,346.00 |
Transport and Logistics | ||
Container Corporation of India Ltd. (CONCOR) | NSE:CONCOR | 423,643,265,500.00 |
Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) | NSE:IRCTC | 596,151,236,885.00 |
Rail Vikas Nigam Ltd. (RVNL) | NSE:RVNL | 789,847,026,243.00 |
Ircon International Ltd. | NSE:IRCON | 157,472,958,538.00 |
RITES Ltd. | NSE:RITES | 102,653,762,425.00 |
Telecom and IT | ||
Mahanagar Telephone Nigam Ltd. (MTNL) | NSE:MTNL | 31,157,101,800.00 |
Other PSUs | ||
Steel Authority of India Ltd. (SAIL) | NSE:SAIL | 451,879,441,302.00 |
National Mineral Development Corporation (NMDC) | NSE:NMDC | 185,260,184,636.00 |
Hindustan Petroleum Corporation Ltd. (HPCL) | NSE:HINDPETRO | 681,484,480,000.00 |
Engineers India Ltd. (EIL) | NSE:ENGINERSIN | 92,765,692,926.00 |
NBCC (India) Ltd. | NSE:NBCC | 231,308,995,056.00 |
MMTC Ltd. | NSE:MMTC | 92,310,001,373.00 |
National Fertilizers Ltd. (NFL) | NSE:NFL | 44,029,411,400.00 |
Rashtriya Chemicals & Fertilizers Ltd. (RCF) | NSE:RCF | 77,845,011,811.00 |
KIOCL Ltd. | NSE:KIOCL | 168,277,183,042.00 |
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