If you’re looking for the best PSU stocks to buy, then it’s important for you to know that as of August 2024, the Public Sector Undertakings (PSU) companies’ total market capitalization rose by 4% in the last 24 months, highlighting their long-term growth potential. PSUs are the engine of India’s economy, powering vital sectors, including mining, banking, energy, and infrastructure. So, let’s know about the top 10 PSU stocks that can dominate your portfolio strategy in 2025.
What are PSU Stocks?
Public Sector Undertaking, or PSU, stocks are ownership shares in companies held by the Indian government. These companies are involved in significant banking, infrastructure, and energy sectors. State Bank of India, Coal India, and NTPC are a few examples of such companies. PSU equities are renowned for their consistency, frequent dividend payments, and strategic significance to the nation’s economy.
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Top 10 PSU Stocks to Invest in 2025
- State Bank of India (SBI)
- Life Insurance Corporation of India (LIC)
- NTPC Ltd
- Oil & Natural Gas Corporation Ltd (ONGC)
- Power Grid Corporation of India Ltd
- Hindustan Aeronautics Ltd (HAL)
- Coal India Ltd
- Bharat Electronics Ltd (BEL)
- Indian Oil Corporation Ltd (IOCL)
- Indian Railway Finance Corporation Ltd (IRFC)
Overview of Best PSU Stocks to Invest in India
1. State Bank of India (SBI)
Serving over 50 crore clients through its extensive network of over 22,500 branches, 63,580 ATMs/ADWMs, and 82,900 BC shops, SBI is the largest bank in India, holding around 1/4th of the market. SBI’s share price is rising primarily, so investors’ interest in SBI’s shares is also on the rise.
2. Life Insurance Corporation of India (LIC)
India’s largest insurance company, LIC, is a public sector life insurance company established in 1956. On the basis of first-year premium income, LIC is the market leader in India’s life insurance sector with a market share of 64.02%. In FY22, the LIC IPO was considered the largest ever IPO in India and the 6th biggest IPO globally.
3. NTPC Ltd
NTPC, India’s largest power utility, has a total installed capacity of 80,020 MW (including joint ventures). Apart from power generation, it has also diversified its business into power trading, consultancy, training of power professionals, rural electrification, and ash utilisation. The corporation is on track to become India’s largest integrated power provider, with a goal capacity of 130 GW by 2032.
4. Oil & Natural Gas Corporation Ltd (ONGC)
About 71% of the nation’s domestic crude oil is produced by ONGC. This crude oil is refined into essential petroleum products like petrol, diesel and LPG by downstream companies like BPCL, IOC, and ONGC’s subsidiaries, HPCL and MRPL. By 2040, ONGC has set the target to double its oil and gas production from the current levels.
5. Power Grid Corporation of India Ltd
More than half of the electricity produced in India is transmitted over Powergrid’s network. The company’s operations include power transmission, distribution, and energy trading. To fulfill the GOI target of achieving 500 GW of non-fossil fuels capacity by 2030, the company has exited from over 110 GW of non-fossil energy capacities.
6. Hindustan Aeronautics Ltd (HAL)
Hindustan Aeronautics Limited (HAL) is an Indian public sector defence and aerospace company located in Bangalore. The company has extensive expertise in designing and manufacturing various aircraft and equipment.
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7. Coal India Ltd
The Ministry of Coal (Government of India) owns Coal India Limited (CIL), a significant public sector organisation in India, and produces almost 83% of India’s overall coal production. With more than 300 mines, the company operates mixed, opencast, and underground mines.
8. Bharat Electronics Ltd (BEL)
Bharat Electronics (BEL), a significant Navratna stock in the defence PSU group, manufactures electronic products and systems for the Navy, Army, and Air Force. With a net worth of more than 13,500 crores, its portfolio is also diversified into homeland security solutions, EVM, e-governance solutions, and EV charging stations.
9. Indian Oil Corporation Ltd (IOCL)
IOCL is a public sector organisation based in New Delhi but registered in Mumbai. The Ministry of Petroleum and Natural Gas oversees its operations. Indian Oil controls over half of India’s petroleum product market, 35% of national refining capacity (via its subsidiary Chennai Petroleum Corporation Ltd (CPCL), and 71% of the downstream sector pipeline capacity.
10. Indian Railway Finance Corporation Ltd (IRFC)
IRFC is a Navratna Public Sector Enterprise administered by the Ministry of Railways. It is committed to accumulating funds from Indian and overseas markets for Indian Railways. The company has financed the acquisition of 75% of the total rolling stock fleet of Indian Railways, including 13,764 locomotives, 76,735 passenger coaches, and 2,65,815 wagons.
Latest Performance of Top 10 PSU Stocks
Here is the performance of the top 10 PSU stocks for 2025 (selected from the BSE PSU Index on the basis of market cap):
*(Data as of April 11, 2025)
Overview of the PSU Stocks in Indian Market
PSUs are among the largest employers in India. It has created thousands of jobs in cities across India. Besides this, PSUs are essential in establishing government policies and programmes. They are involved in implementing government programmes for rural development, poverty reduction, socioeconomic welfare, etc.
Advantages and Risks Associated with Investing in PSU Stocks
PSU stock investments include many benefits, including stability, dividend income, and potential for long-term development. These stocks have a more cautious character and a sense of security because the government supports them.
However, certain risks are to be considered, including bureaucracy, earnings volatility, and political interference. Furthermore, PSU stocks might underperform privately owned companies because they place less emphasis on shareholder value.
Why Should You Invest in PSU Stocks in India?
PSU stocks have soared, outperforming the Nifty. They are seeing phenomenal development, with some exceeding 100% in a year and others rising by 300-400%. In May 2024, the percentage of public sector companies in India’s overall stock market valuation reached a seven-year high of more than 16%, boosted by a robust increase in state-owned companies. This spike is a massive increase from the low of 7.8% in October 2020, which has doubled since then and contrasts with the peak of 29% in February 2009.
How to Start Investing in PSU Stocks?
SMC streamlines your trading experience, allowing you to manage your investments confidently and successfully without any hassle. Invest in PSU stocks with our professional guide.
Here are three easy steps to start investing in PSU stocks :
- Go to the official website of SMC Global Securities or download the SMC ACE App.
- Open a free demat account
- Start investing
Conclusion
While many PSUs have been continually successful throughout the years, others have suffered setbacks owing to market competitors, inefficiency, and more. As a result, before investing in PSU stocks, you should conduct thorough research and consider numerous elements that influence investment decisions.
Author: All Content is verified by SMC Global Securities.
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