5 Best PSU Stocks to Invest in India

Public sector undertakings (PSUs) have been instrumental in establishing a robust industrial foundation and maintaining tight ties to the economy’s fundamental sectors. The Indian government has a major stake in these businesses. The foundational economic sectors play a pivotal role in nation-building and help to establish a positive course for the economy as a whole. 

IRCTC

There was an initial public offering (IPO) by Indian Railways Catering & Tourism Corporation Ltd. The IRCTC Share Price has risen from Rs 176.34 to its present level of Rs.833.20. This PSU is in a unique position of strength, enjoying near-total market dominance. In addition to being a dividend payer from its first year of listing, IRCTC is also a publicly traded company.

Although PSUs have a negative reputation among investors, we have observed that some have provided excellent returns in recent years. In addition, there are a plethora of companies that have lower share values at the moment but have growth potential.

ONGC

ONGC is the biggest oil firm in India. Besides its upstream focus on exploration and production. Additionally, the corporation is involved in the processes that take crude oil and transform it into products suitable for the general public. ONGC is vertically integrated and in FY19 it produced 34.34 million metric tonnes of oil and 30.56 million metric tonnes of gas. Its downstream partner, HPCL, is an oil and gas company. At the close of the fiscal year 2019, oil and gas reserves totaled 1,853.23 MMTOE. ONGC reported a net profit of Rs. 96,000 Crs., which is equivalent to Rs. 4,154 per barrel.

Coal India

The bulk of India’s coal production is under the hands of Coal India, which also has 48% of the nation’s known coal reserves. Since there are not many other viable fuel sources, India will continue to depend largely on coal to satisfy its energy requirements despite the country’s enormous coal reserves since there are not many other possibilities. In FY2020, Coal India was responsible for over 85% of the country’s coal output. About 80% of the firm’s output went to the electricity industry. Power demand was restrained in H1FY21 owing to a state-wide lockdown instituted to combat a new coronavirus, which harmed both consumption and profitability.

GAIL India (Ltd.)

GAIL operates as a monopoly in the natural gas and liquefied petroleum gas (LPG) pipeline sectors, and in addition to that, it sells a huge variety of other goods. In addition, the corporation has carved out a solid niche for itself in the exploration and production sector, as well as the distribution of gas, petrochemicals, and telecommunications. The fact that the organisation is involved in such a diverse variety of business verticals helps to lower the operational risk that it faces. The Government of India, which owns 51.90 percent of the business, has been and will continue to be a reliable source of assistance.

NMDC

The National Mineral Development Corporation (NMDC) is not only India’s most important producer of iron ore, but it also discovers, develops, and sells gems, sponge iron, and wind energy. Iron ore accounts for between 17 and 18% of the company’s total market share (excluding captive iron ore production). It is possible that high-quality iron ore deposits, which typically grade between 63% and 66% iron ore or higher, would be used by it.

Conclusion:

As of this writing, the combined market value of all PSU businesses is more than Rs 10 lakh crore. PSUs often pay substantial amounts of money in dividends, excise duty, customs duty, and corporation taxes. Well, you need a demat account for investing in stocks and if you don’t have, then you can open demat account online also these days. It is simple and fast.