Best PSU Stocks in India 2025
Posted by : sachet | Fri Feb 14 2025
A PSU (Public Sector Undertaking) is a business organisation in which the GOI (Government of India) holds 51% of the stake. These companies mainly aim to meet the public interest and operate across different sectors like banking, chemicals, insurance, infrastructure, energy, etc. If you are an investor with a low risk tolerance and looking to invest in a potential place to generate higher returns, you should explore the given PSU stocks list in this blog. Also, conduct your own research to identify the best PSU stocks in India for 2025.
What are PSU Stocks?
PSU stocks are the equities of government-owned enterprises operating to serve the public interest. The government is the major stakeholder in these companies and contributes its best efforts to economic development. In recent times, top PSU stocks in India have regained investors’ interest with the help of the highest dividend payouts. For example, Coal India Ltd. declares a 6.24% dividend in 2024.
Extensive support of GOI helps these stocks sustain against market volatility and economic slowdowns. PSU companies play a vital role in employment generation, infrastructure growth, and societal welfare in India. Thus, making an investment in such companies could be a shining star in the next year. Moreover, these stocks can create a safe and diversified investment portfolio. Explore the PSU stocks list below and assess the risks associated with them to invest potentially.
PSU Stocks List to Buy in 2025
| Stock Name | LTP (in INR) | Market Capitalisation (in cr.) | 52-Week High (in INR) | 52-Week Low (in INR) |
| State Bank of India Ltd. | 869.30 | 7,75,000 | 912.00 | 600.65 |
| NTPC Ltd. | 367.80 | 3,57,000 | 448.45 | 280.85 |
| ONGC Ltd. | 257.50 | 3,24,000 | 345.00 | 192.05 |
| Power Grid Corporation Ltd. | 328.20 | 3,05,000 | 366.25 | 222.70 |
| Coal India Ltd. | 416.55 | 2,57,000 | 543.55 | 342.30 |
| NHPC Ltd. | 85.87 | 86,260 | 118.40 | 58.00 |
| UCO Bank Ltd. | 48.73 | 58,300 | 70.65 | 36.75 |
| National Aluminium Company Ltd. | 254.67 | 46,740 | 262.99 | 96.40 |
| NBCC (India) Ltd. | 102.55 | 27,680 | 139.83 | 48.33 |
| MMTC Ltd. | 82.50 | 12,390 | 131.80 | 53.95 |
*Data is updated as of 11th December 2024
Factors to Consider When Investing in PSU Stocks in India
To invest in PSU stocks in India, it is important to consider several factors that might become hurdles in the future. These factors include.
- Dividend History
PSU stocks in India often declare higher dividend payouts for investors. However, the government can alter the consistency of dividends, which might impact the stock performance in the future. Check for the dividend history of the company on the basis of the past few years to predict the consistency level for the future. PSUs with a compelling track record of declaring dividends could be the best to invest in 2025.
- Government Policies
Government policies play a vital role in influencing the performance of public sector undertakings. Stay informed about the new policies or changes to existing ones to take advantage of sector reforms. For example, analysts are expecting a boom in some PSU shares during the time of budget 2025 in upcoming February.
- Financial Health
Evaluate and assess the financial health of the company with the help of different parameters like cash flow position, EPS (Earnings Per Share), PE/PB ratios, profit margins, etc. Select the best PSU stocks with strong fundamentals to benefit from the steady growth potential in the stock market.
- Management Quality
Management of the public sector enterprises mainly depends on the government. Try selecting the top PSU stocks in India with robust leadership. To evaluate the management quality, you can consider researching the members’ experiences and strategies to manage the business operations. Effective management quality of the firm might help it sustain in the competitive business environment.
PSU Stocks List Based on 1-Year Returns
| Stock Name | 1-Year Returns (%) |
| National Aluminium Company Ltd. | 160.18 |
| NBCC (India) Ltd. | 92.36 |
| MMTC Ltd. | 43.35 |
| Power Grid Corporation Ltd. | 42.11 |
| State Bank of India Ltd. | 41.51 |
| NHPC Ltd. | 35.98 |
*Data is updated as of 11th December 2024
Dividend Yield in PSU Stocks in 2024
| Stock Name | Dividend Yield (%) |
| Coal India Ltd. | 6.24 |
| ONGC Ltd. | 4.86 |
| Power Grid Corporation Ltd. | 3.58 |
| National Aluminium Company Ltd. | 3.14 |
| NHPC Ltd | 2.21 |
| NTPC Ltd. | 1.87 |
*Data is updated as of 11th December 2024
Benefits of Investing in PSU Stocks
PSU stocks in India offer investors with several advantages. Let’s explore them together.
- Growth Potential: The PSU stocks list includes the best companies operating across potential sectors like energy, infrastructure, chemicals, etc. Thus, investing in these stocks could provide investors with higher growth prospects to build wealth in the long term. To appreciate the capital, research on the stocks indicates high growth in the coming years.
- Stable Dividend Yields: The government owns and operates public companies to meet public interest. This enables the best PSU stocks to offer high dividend payouts based on their profitability. An effective level of cash flow also plays an important role in helping these companies maintain profit margins yearly.
- Low Risks: The Indian stock market is all inclusive of several risk factors that might impact the investors differently. However, the resilience of PSUs might help investors with low risk tolerance to appreciate the capital. Stocks of government companies can sustain against market volatility and economic downturns.
- Government Support: Nowadays, the government is showing a keen interest in the growth of public sector undertakings. And it seems to be an explicit opportunity for investors to generate higher returns in the long term. Extensive government support for PSU stocks during the financial crisis might help investors sustain their returns.
Risks Associated With PSU Stocks
The stock market is all about high-risk, high-reward play. But, investors need to overcome the risks associated with the top PSU stocks. Here are some minimal risks to consider before investing in these stocks.
| Risks | Impact |
Disinvestment | The government decides whether to sell or hold a stake in the company. However, selling a stake in a PSU might impact its stock performance in the short term. To generate consistent returns from the top PSU stocks in India, it is essential to stay informed about the changes the government makes in the percentage of held stakes. |
Bureaucracy | High government interference in the company might lead to slow decision-making, which might impact adaption and integration into innovation. This bureaucratic procedure might impact the stock performance in the share market. Invest in fundamentally strong shares with a high focus of the government to safeguard against this risk. |
Low Liquidity | The best PSU stocks in India might have to suffer low trading volumes that might lead to liquidity challenges. It can impact the behaviour of investors toward these stocks. Invest in popular stocks with high market capitalisation and strong technical indicators to be resilient during economic downturns and volatile markets. |
To Conclude
Investing in PSU stocks in India might offer investors several benefits like capital appreciation, stable dividends, high growth potential, and extensive government support. However, apart from these benefits, these stocks often include some risks to consider. The risks associated with the best PSU stocks in India include low liquidity, disinvestment, and bureaucracy. To generate higher returns from these stocks, one should conduct a thorough research and identify the fundamentally strong shares. Use technical indicators like PE ratio, EPS, etc., in the research to make an informed investment decision.
FAQs
Which PSUs are listed on the stock exchange?
Ans. Here are some public sector undertakings listed on the national stock exchange.
- NTPC Ltd. (NSE: NTPC)
- NHPC Ltd. (NSE: NHPC)
- Coal India Ltd. (NSE: COALINDIA)
- ONGC Ltd. (NSE: ONGC)
- Power Grid Corporation Ltd. (NSE: POWERGRID)
- National Aluminium Company Ltd. (NSE: NATIONALUM)
- State Bank of India Ltd. (NSE: SBIN)
- MMTC Ltd. (MMTC)
- NBCC (India) Ltd. (NSE: NBCC)
- UCO Bank Ltd. (NSE: UCOBANK)
How to invest in top PSU stocks?
Ans. To invest in PSU stocks in India, consider the following steps.
- Step 1: Get registered with a broker and open a demat account.
- Step 2: Research top PSU stocks and select the best among them.
- Step 3: Place a buy order through a Demat account by selecting the adequate quantity.
- Step 4: Monitor your returns in the portfolio section and book profit on time.
Is investing in PSU stocks worth it?
Ans. Public sector undertakings, backed by government support, have steady growth potential. Governments often declare high dividend payouts to encourage investors to invest more of their capital. The robust cash flow statements of the best PSU stocks make these options worthwhile investments.
Which PSU stocks will boom in 2025?
Ans. The Indian government is ready to introduce some of its impeccable strategies to bring a drastic reform in the PSU sector. It will also help us see a rally in the top PSU stocks in India. Here are some of the stocks with expert opinions
| Stock Name | Market Capitalisation (in cr.) | Buy Ratings (in %) |
| State Bank of India Ltd. | 7,75,000 | 87 |
| NTPC Ltd. | 3,57,000 | 94 |
| ONGC Ltd. | 3,24,000 | 83 |
| Power Grid Corporation Ltd. | 3,05,000 | 72 |
| Coal India Ltd. | 2,57,000 | 73 |
| NHPC Ltd. | 86,260 | 86 |
| National Aluminium Company Ltd. | 46,740 | 60 |
*Data is updated as of 11th December 2024
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