Public sector undertakings (PSUs) are companies that are owned and operated by the government of a country. In India, PSUs are classified as either central public sector enterprises (CPSEs) or state-level public enterprises (SLPEs). CPSEs are owned and controlled by the central government, while SLPEs are owned and controlled by state governments.
PSU stocks refer to the stocks or shares of these government-owned companies that are listed on the stock exchange and can be bought and sold by investors. Investing in PSU stocks can be a way for investors to participate in the ownership and potential success of these companies. However, it’s important to carefully consider the risks and potential returns of any investment, including PSU stocks. It may be helpful to research the financial performance, management, industry, and competition of the PSU you are considering before making any investment decisions.
Classification of PSUs in India:
In India, public sector undertakings (PSUs) are classified into three categories based on their ownership and control:
Central public sector enterprises (CPSEs): These are PSUs that are owned and controlled by the central government of India. CPSEs include companies in sectors such as oil and gas, power, telecommunications, and defense.
State-level public enterprises (SLPEs): These are PSUs that are owned and controlled by state governments in India. SLPEs may operate in a variety of industries, including power, transportation, and water.
Public Sector Banks (PSBs): include banks that have at least 51% of their capital shares owned by the government, either directly or through other PSBs.
It’s important to note that the classification of a PSU may change over time based on changes in ownership or control. It’s also worth noting that while the government has a significant level of ownership and control over PSUs, these companies are required to operate on a commercial basis and are subject to the same laws and regulations as private sector companies.
Now, lets we will discuss the Top PSU shares to Buy in 2023:
List of Top PSU Stocks to Buy in 2023
| Company Name | CMP – Dec 2022 | NSE Symbol | Industry |
| Oil & Natural Gas Corporation Ltd | 140 | ONGC | Oil Exploration |
| NTPC Ltd | 163 | NTPC | Power Generation/Distribution |
| State Bank of India | 573 | SBIN | Bank – Public |
| Indian Overseas Bank | 26 | IOB | Bank – Public |
| Coal India Ltd | 216 | COALINDIA | Mining & Minerals |
| Bharat Heavy Electricals Ltd | 74 | BHEL | Engineering – Industrial Equipments |
| Power Grid Corporation of India Ltd | 211 | POWERGRID | Power Generation/ Distribution |
| GAIL (India) Ltd | 91 | GAIL | Industrial Gases & Fuels |
Also Read: Best Penny Stocks to Buy in India 2023
Overview of the Best PSU Stocks to Buy in India
1> Oil & Natural Gas Corporation Ltd (ONGC)
Oil and Natural Gas Corporation Limited (ONGC) is a central public sector enterprise (CPSE) in India that is engaged in the exploration, development, and production of oil and natural gas. ONGC has consistently reported strong financial performance, with revenue and profit growth in recent years.
ONGC has operations in various locations around the world, including in India, the Middle East, Africa, and the Americas. This diversification may help reduce the company’s risk and enhance its stability.
As a CPSE, ONGC is owned and controlled by the central government of India. This may provide some level of stability and security for investors.
ONGC has a strong brand and reputation, which may enhance its competitiveness and appeal to customers.
2> NTPC Ltd
National Thermal Power Corporation Limited (NTPC) is a central public sector enterprise (CPSE) in India that is engaged in the generation and sale of electricity. NTPC has a diverse portfolio of power plants, including coal-based, gas-based, and renewable energy sources such as solar and hydroelectric. This diversification may help reduce the company’s risk and enhance its stability.
As a CPSE, NTPC is owned and controlled by the central government of India. This may provide some level of stability and security for investors. NTPC is one of the largest power generation companies in India and has a strong market position in the sector.
3> State Bank of India (SBI)
State Bank of India (SBI) is a central public sector enterprise (CPSE) in India and the largest bank in the country by assets. SBI offers a range of financial products and services, including retail banking, corporate banking, and investment banking, as well as insurance and asset management. The bank serves a large customer base through its network of branches and ATMs across India and digital channels such as its mobile banking app and online banking platform. SBI is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) and its shares can be bought and sold by investors. As a CPSE, SBI is owned and controlled by the central government of India.
4> Indian Overseas Bank
Indian Overseas Bank (IOB) is a public sector bank in India that is owned and controlled by the government of India. IOB offers a range of financial products and services, including retail banking, corporate banking, and investment banking, as well as insurance and asset management. IOB is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) and its shares can be bought and sold by investors.
As a public sector bank, IOB is owned and controlled by the government of India. This may provide some level of stability and security for investors. IOB has a strong brand and reputation, which may enhance its competitiveness and appeal to customers.
5> Coal India Ltd
Coal India Limited (CIL) is a central public sector enterprise (CPSE) in India that is engaged in the production and distribution of coal. CIL is the largest coal-producing company in the world and accounts for a significant share of India’s total coal production. The company operates through a network of subsidiaries and has operations in various locations in India.
As a central public sector enterprise (CPSE), CIL is owned and controlled by the central government of India. This may provide some level of stability and security for investors.
CIL plays a critical role in India’s energy sector and is a significant contributor to the country’s power generation capacity.
6> Bharat Heavy Electricals Ltd
Bharat Heavy Electricals Limited (BHEL) is a central public sector enterprise (CPSE) in India that is engaged in the design, engineering, manufacture, and supply of a wide range of heavy electrical equipment and systems. BHEL is a leading manufacturer of power generation, transmission, and distribution equipment in India and has a strong presence in the global market.
The company operates through several business segments, including power, industry, transportation, and renewable energy. BHEL is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) and its shares can be bought and sold by investors. As a CPSE, BHEL is owned and controlled by the central government of India.
BHEL has a strong presence in the global market and exports its products to several countries around the world.
7> Power Grid Corporation of India Ltd
Power Grid Corporation of India Limited (PGCIL) is a central public sector enterprise (CPSE) in India that is engaged in the transmission of electricity and the operation of the national transmission grid. PGCIL is a key player in India’s power sector and is responsible for transmitting electricity from generating stations to distribution utilities and other customers.
The company operates through several subsidiaries, including Power Grid Northern Region Transmission System-I, Power Grid Southern Region Transmission System-I, and Power Grid Western Region Transmission System-I, among others. PGCIL is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) and its shares can be bought and sold by investors. As a CPSE, PGCIL is owned and controlled by the central government of India.
8> GAIL (India) Ltd
GAIL (India) Limited (GAIL) is a central public sector enterprise (CPSE) in India that is engaged in the exploration, development, and production of natural gas, as well as the transmission, distribution, and marketing of natural gas and liquified petroleum gas (LPG). GAIL is a leading player in India’s natural gas sector and operates a number of pipelines across the country.
GAIL is the market leader in the transmission of natural gas in the nation with a network of over 12,400 km of pipeline network, out of the total pipeline network in India of approx. 17,500 km
Factors To Consider Before Investing in PSU Stocks India
Here are a few factors to consider before investing in PSU stocks:
Financial performance: It’s important to carefully evaluate the financial performance of the PSU you are considering investing in. Look at factors such as revenue, profit, net worth, and debt levels to get a sense of the company’s financial health.
Diversification: Diversification is an important consideration when investing in any stock, including PSU stocks. Look at the company’s operations and products to see if it has a diverse range of offerings that may help reduce risk.
Government ownership: As PSUs are owned and controlled by the government, it’s important to consider the stability and security that this may provide. However, it’s also important to be aware that the government’s policies and actions may impact the performance of PSUs.
Market position: Consider the company’s market position and competitiveness within its sector. Is the company a leader in its field, or is it struggling to keep up with its competitors?
Risks: As with any investment, it’s important to consider the risks associated carefully.
Disclaimer:
The information provided in this blog is for informational purposes only and should not be construed as financial advice. Before making any investment decisions, it is recommended that you seek advice from a professional financial advisor.