Public Sector Undertakings (PSUs) play an important role in the Indian economy. At least 51% of the paid-up share capital of such companies is owned Nb by the government of India.
Due to the government backing and strong fundamentals, PSU stocks have huge potential to grow in the long run. That is why investors prefer to invest in PSU stocks.
In this article, we will go through the best PSU stocks to invest in 2023.
Best PSU Stocks for 2023
Let’s discuss ten of the top PSU stocks to buy now according to Google Search volumes:
- Coal India Limited (CIL)
- Oil and Natural Gas Corporation Limited (ONGC)
- Indian Oil Corporation Limited (IOCL)
- NTPC Limited
- Bharat Petroleum Corporation Limited (BPCL)
- Steel Authority of India Limited (SAIL)
- Power Grid Corporation of India Limited (POWERGRID)
- GAIL Limited (GAIL)
- Bharat Electronics Limited (BEL)
- REC Limited
1. Coal India Limited (CIL)
Coal India Limited is the Maharatna category of PSUs operating in India. It is a government-owned mining company that came into existence in November 1975.
The company produces 83% of the overall coal production of India. It is also one of the largest corporate employers with an employee strength of more than 2.72 lakhs.
- Coal India Share Price: ₹334.25
- Market Cap: ₹2,14,525.00 Cr
2. Oil and Natural Gas Corporation Limited (ONGC)
ONGC is India’s biggest oil exploration and production company. It is engaged in activities like refining, producing, and marketing oil and gas. ONGC was established in 1956.
ONGC is also one of the high dividend-paying PSU stocks in the country with two dividend payouts in 2023 alone. ONGC has its headquarters in New Delhi.
The company also operates in Latin America, the Middle East, Africa, Asia-Pacific and Europe.
- ONGC Share Price: ₹191.10
- Market Cap: ₹2,48,901.00 Cr
3. Indian Oil Corporation Limited (IOCL)
Indian Oil Corporation Limited is largely known to be a diverse energy company. The company manages a hydrocarbon value chain.
This includes refining, pipeline transportation, and marketing of petroleum products, exploration and production of crude oil, natural gas, and petrochemicals.
IOCL was listed in the top 100 ranking of the Fortune 500 list of 2023. The company has over 36445 fuel stations across the nation.
- IOCL Share Price: ₹101.05
- Market Cap: ₹1,45,152.00 Cr
4. NTPC Limited
NTPC is an energy company. The company is engaged in the business of producing electricity and sells it to state power utilities.
In addition, this company also provides services of project management, oil and gas exploration, consultancy, rural electrification, etc.
NTPC came into existence in 1975. It has been awarded among the “Top 50 Companies to Work in India” by Economic Times Survey.
- NTPC Share Price: ₹250.20
- Market Cap: ₹2,43,338.00 Cr
5. Bharat Petroleum Corporation Limited (BPCL)
BPCL is an integrated oil and gas company. The company is involved in several activities ranging from refining crude oil, and manufacturing of oil and natural gas to marketing and distribution of petroleum products.
BPCL has its headquarters in Mumbai. It was established in 1976. It has been ranked in the Fortune 500 oil refining, exploration and marketing conglomerate.
- BPCL Share Price: ₹387.50
- Market Cap: ₹85,023.90 Cr
6. Steel Authority of India Limited (SAIL)
SAIL is a metal and mining company. The company is mainly involved in the manufacturing of iron and steel products such as electrical sheets, electrical steel, railway products and plates, cold rolled sheets, etc.
SAIL is India’s largest steel-producing company and is one of the Maharatnas of the country. SAIL was founded in January 1973.
- SAIL Share Price: ₹90.70
- Market Cap: ₹37,290.40 Cr
7. Power Grid Corporation of India Limited (POWERGRID)
PowerGrid is a Maharatna company headquartered in Gurgaon, India, and was started in the year 1989.
The company has a customer base in South Asia and Oceania. PowerGrid has major responsibility for the functioning and maintenance of interstate transmission systems.
PowerGrid has been awarded as the ‘Best Organisations for Women – 2023’ by Economic Times. It has also been awarded for extensive procurement by the Government e-Marketplace (GeM) portal.
- PowerGrid Share Price: ₹208.85
- Market Cap: ₹1,94,662.00 Cr
8. GAIL (India) Limited
GAIL is mainly engaged in the production and transportation of LPG and natural gas. The company has diversified its business in other segments such as petrochemicals, telecom, hydrocarbons, etc.
GAIL came into existence in August 1984. The company is also expanding its presence in renewable energy like solar, wind, biofuel, etc.
The company has done an MOU with GACL for setting up a 1000-crore Bio-ethanol plant in Gujarat.
In 2022 Gail declared that it is India’s largest proton exchange membrane in electrolyzer in MP to produce green hydrogen.
- GAIL Share Price: ₹124.90
- Market Cap: ₹81,958.60 Cr
9. Bharat Electronics Limited (BEL)
BEL manufactures electronic products for the Indian Defence Service and other government organizations.
The company manufactures products like land-based radars, tank and armored fighting vehicle electronic systems, weapon systems, etc. BEL was founded in 1954 in Bangalore, Karnataka.
There are nine units of the company in India. This includes cities like Ghaziabad, Hyderabad, Chennai etc. Each of these nine units caters to a specific type of product mix and customers.
- BEL Share Price: ₹143.15
- Market Cap: ₹1,05,188.00 Cr
10. REC Limited
REC is a Maharatna PSU working under the Ministry of Power. It is a leading infrastructure finance company.
The company provides financial help to state power utilities for the generation, transmission, and distribution of power.
The company came into existence in 1969. The company is headquartered in Gurgaon, India.
- REC Share Price: ₹339.10
- Market Cap: ₹91,320.20 Cr
Factors to Consider When Investing in PSU Stocks
Weighing the pros and cons of every investment is key to building wealth. Along similar lines, you must weigh the following factors before investing in PSU stocks.
1. Stability
PSU stocks are known to be stable as they are backed by the government.
The government ownership gives you a sense of assurance which makes them a potential investment avenue.
That said, every stock is at the mercy of economic conditions, business metrics, and investor sentiment.
2. Dividend Earnings
PSUs have been consistent in sharing dividends with their shareholders. This makes it more interesting.
If you are looking for a passive income source then these stocks can be an option.
3. Consistent Earnings
Earnings are an important factor to consider while investing in a company.
PSUs who have had good earnings in the last few years have performed well in the markets.
High Dividend Paying PSU Stocks
It has been observed that many of the PSUs reward their investors with dividends regularly.
They believe in sharing their profit with shareholders. Some of the high dividend-paying stocks in PSUs are:
- ONGC
- Coal India
- Oil India
- REC
These companies have given a dividend yield of ~9% in the past 12 months.
Conclusion
The list of best PSU stocks is full of companies that have a solid track record. These companies have solid fundamentals and a history of delivering for their shareholders.
That said, you must do your own research before investing in any stock so that you can ensure the investment aligns with your goals, risk profile, and overall portfolio.
Disclaimer: Our blogs are not to be construed as investment advice. Trading and investing in the securities market carries risk. Please do your own due diligence or consult a trained financial professional before investing. Copyrighted and original content for your trading and investing needs.
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