What are Government Shares/Stocks?
Shares of companies owned or controlled by central or state governments are called government shares or government stocks. These companies are also known as PSUs and PSEs, which is short for public-sector enterprises. Many of these companies operate in the banking sector, and so are called public-sector banks (PSBs).
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To be sure, government stocks refer to companies in which the government owns at least a 51% stake. It doesn’t include companies in which the government owns a stake less than 50% or in which the government once may have held more than 51% stake but divested its holdings over time below that threshold.
Overall, India has more than 200 PSUs though not all such companies are publicly listed. While only a handful of PSUs that are owned by state governments are listed on stock exchanges, there is a long list of central government-owned PSUs that are traded on bourses, giving investors plenty of options to choose from.
Performance Overview of Best Government Stocks
Company Market Cap* (Rs cr) TTM EPS PE ROE FY23 revenue (Rs cr) FY23 PAT (Rs cr)
ONGC
NTPC
BPCL
Bharat Electronics
Coal India
Power Grid
PFC
Hindustan Aeronautics
IRCTC
IRFC
. ONGC Ltd
The Maharatna company is India’s flagship oil and gas explorer and accounts for nearly three-fourth of the country’s crude oil production. Through its subsidiaries HPCL and MRPL, the company is also a major player in the refining business while its unit ONGC Videsh Ltd operates oil and gas blocks in more than a dozen countries.
. NTPC Ltd
This Maharatna company is India’s biggest power generation firm. NTPC accounts for almost 25% of India's total power generation. It has a capacity of 73,874 MW, comprising mainly coal and gas-based power plants. However, by 2032, it aims to ramp up its non-fossil-fuel-based generation capacity to nearly 50% of its portfolio.
. Bharat Petroleum Corp Ltd
BPCL is one of two major Indian refining PSUs, apart from Indian Oil Corp. It operates three large refineries, in Mumbai, Kochi and Bina (Madhya Pradesh) and also operates more than 20,000 fuel stations across India. The company has been on the government’s radar for privatisation.
. Bharat Electronics Ltd
The aerospace and defence electronics PSU primarily manufactures advanced electronic products for ground and aerospace applications. The company has 10 manufacturing facilities where it makes navigation systems, radars, electronic warfare systems, avionics and other weapons systems. It also offers cybersecurity services, software services and electronic manufacturing services to the private sector.
Coal India Ltd
This Maharatna company is not only India’s but also the world’s single-largest coal miner. Coal India and its subsidiaries operate more than 300 mines across India, and produce nearly 700 million tonnes of coal annually.
Power Grid Corp of India Ltd
Power Grid is India’s national electricity transmission utility. The Maharatna company operates millions of kilometers of transmission lines and hundreds of substations. It also has a telecom network and provides consultancy services to nearly two dozen countries worldwide.
Power Finance Corp
PFC and its subsidiary Rural Electrification Corp provide the financial backbone to India’s power sector. The two non-banking finance companies offer loans and consulting services to state and central power utilities, private-sector developers and state governments for generation, transmission, distribution and system improvement projects.
. Hindustan Aeronautics Ltd
Bangalore-based HAL is India’s premier aerospace and defence production company. The defence PSU manufactures fighter and trainer aircraft as well as and helicopters for the Indian Air Force, civilian aircraft, engines and other equipment for space missions, and avionics systems
Indian Railway Catering and Tourism Corporation
IRCTC provides ticketing and catering services for the state-owned Indian Railways. It was founded in 1999 and operates under the railway ministry. The company floated its IPO in October 2019. Since then, its market capitalisation has zoomed from Rs 5,120 crore to nearly Rs 80,000 crore
Indian Railway Finance Corp
IRFC is another railway PSU. Its main task is to raise financial resources for the railways’ operations and expansion. The company launched its initial public offering in 2021. Since then, its shares have jumped nearly seven times.