Quick Summary
Public Sector Undertakings (PSUs) have long been considered the backbone of India’s economy. With strong government backing, reliable dividend payouts, and strategic importance in sectors like oil, banking, power, and defense, PSU stocks remain a compelling choice for investors. In this blog, we explore the top 10 PSU stocks you can consider in 2025 for long-term wealth creation.
ONGC (Oil & Natural Gas Corporation)
- Sector: Energy
- Why to Consider: India’s largest oil & gas producer with strong cash flows and high dividend yield.
SBI (State Bank of India)
- Sector: Banking
- Why to Consider: The largest public sector bank in India with strong retail growth and digital transformation.
Coal India
- Sector: Mining
- Why to Consider: World’s largest coal producer, enjoys monopoly status with consistent dividend payouts.
NTPC (National Thermal Power Corporation)
- Sector: Power Generation
- Why to Consider: Leading power producer with stable returns and long-term visibility.
BPCL (Bharat Petroleum Corporation Limited)
- Sector: Oil & Gas
- Why to Consider: Strong refining and marketing infrastructure; possible benefits from strategic disinvestment.
IOC (Indian Oil Corporation)
- Sector: Oil & Gas
- Why to Consider: Largest oil retailer in India; government-backed with steady performance.
Power Grid Corporation of India
Sector: Power Transmission
Why to Consider: Dominant player in transmission with strong fundamentals and consistent earnings.
GAIL (India) Limited
- Sector: Natural Gas
- Why to Consider: India’s leading gas distribution company, plays a vital role in the clean energy transition.
Bank of Baroda
- Sector: Banking
- Why to Consider: Strong post-merger balance sheet, expanding digital services, and retail focus.
- HAL (Hindustan Aeronautics Limited)
- Sector: Aerospace & Defence
- Why to Consider: Key player in India’s defense manufacturing with long-term growth prospects in exports and indigenous production.
Top 10 Best PSU Stocks in India 2025
PSUs operate across diverse sectors like banking, energy, and infrastructure, offering investors a chance to benefit from their steady performance and attractive dividends. If you’re considering diversifying your portfolio, top PSU stocks could be a reliable addition, particularly for long-term investment.
| Rank | Company Name | Sector | NSE Symbol | Highlights |
|---|---|---|---|---|
| 1 | ONGC (Oil & Natural Gas Corp) | Energy | ONGC | High dividend, energy leader |
| 2 | SBI (State Bank of India) | Banking | SBIN | Largest PSU bank |
| 3 | Coal India | Mining | COALINDIA | Government monopoly in coal |
| 4 | NTPC (Power Grid Corporation) | Power Generation | NTPC | Stable utility returns |
| 5 | Bharat Petroleum Corporation | Oil & Gas | BPCL | Strong refining infrastructure |
| 6 | Indian Oil Corporation | Oil & Gas | IOC | Extensive retail fuel network |
| 7 | Power Grid Corporation | Power Transmission | POWERGRID | Efficient transmission network |
| 8 | GAIL India | Natural Gas | GAIL | Natural gas leader |
| 9 | Bank of Baroda | Banking | BANKBARODA | PSU bank with strong fundamentals |
| 10 | Hindustan Aeronautics (HAL) | Aerospace & Defense | HAL | Key defense manufacturer |
Detailed Insights on Best PSU Stocks in India
1. ONGC (Oil and Natural Gas Corporation)
ONGC is India’s largest crude oil and natural gas producer, contributing ~70% of domestic production. Backed by strong cash flows, ONGC is a favorite for dividend-seeking investors. In FY24, the company reported strong earnings due to high oil prices and low exploration costs.
- Sector: Energy
- NSE Code: ONGC
- Market Cap: ₹3.5+ Lakh Crore (Approx.)
- Dividend Yield: ~6-7%
2. SBI (State Bank of India)
India’s largest public sector bank with diversified operations in retail, corporate, and digital banking. SBI has shown consistent improvement in asset quality, net interest margin (NIM), and ROE. The bank’s digital platforms like YONO also contribute to future growth.
- Sector: Banking
- NSE Code: SBIN
- Market Cap: ₹8+ Lakh Crore
- Dividend Yield: ~1.5%
3. Coal India
The world’s largest coal mining company, Coal India enjoys a monopoly in the domestic coal market. It generates massive free cash flow and pays hefty dividends. The company is also investing in cleaner mining technologies and diversification.
- Sector: Mining
- NSE Code: COALINDIA
- Market Cap: ₹2+ Lakh Crore
- Dividend Yield: ~8-10%
4. NTPC (National Thermal Power Corporation)
NTPC is India’s largest thermal power generator with a shift toward renewables. Its strong project pipeline, consistent performance, and government backing make it a reliable choice for long-term investors.
- Sector: Power Generation
- NSE Code: NTPC
- Market Cap: ₹3+ Lakh Crore
- Dividend Yield: ~3-5%
5. BPCL (Bharat Petroleum Corporation Limited)
A leading oil refining and marketing PSU, BPCL has strong assets and operational efficiency. Government’s potential disinvestment in BPCL makes it an exciting turnaround stock in 2025.
- Sector: Oil & Gas
- NSE Code: BPCL
- Market Cap: ₹1.2+ Lakh Crore
- Dividend Yield: ~3-4%
6. IOC (Indian Oil Corporation)
IOC is India’s largest oil retailer and refiner. With over 34,000 retail outlets, it is a crucial player in the fuel supply chain. A steady business with government protection makes it a safe bet.
- Sector: Oil & Gas
- NSE Code: IOC
- Market Cap: ₹2.2+ Lakh Crore
- Dividend Yield: ~4-6%
7. Power Grid Corporation
Power Grid manages most of India’s high-voltage transmission lines. With consistent revenue, low debt, and good dividend policy, it is ideal for defensive investors.
- Sector: Power Transmission
- NSE Code: POWERGRID
- Market Cap: ₹2.8+ Lakh Crore
- Dividend Yield: ~5-6%
8. GAIL (India) Limited
GAIL is India’s largest gas transportation and marketing company. As the country transitions toward cleaner energy, GAIL’s relevance and profitability are expected to grow.
- Sector: Natural Gas
- NSE Code: GAIL
- Market Cap: ₹1.2+ Lakh Crore
- Dividend Yield: ~4%
9. Bank of Baroda
Post-merger with Dena and Vijaya Bank, BoB has emerged as a stronger PSU bank. Improved asset quality and expanding digital banking are key drivers for future growth.
- Sector: Banking
- NSE Code: BANKBARODA
- Market Cap: ₹1.3+ Lakh Crore
- Dividend Yield: ~2%
- Why It’s a Top Pick:
10. HAL (Hindustan Aeronautics Limited)
HAL is the backbone of India’s defense manufacturing. With growing orders from the Indian government and export potential, HAL is a long-term growth stock in a strategic sector.
- Sector: Aerospace & Defense
- NSE Code: HAL
- Market Cap: ₹2+ Lakh Crore
- Dividend Yield: ~1.5%
Benefits of Investing in PSU Stocks
- High Dividend Yield
- Government Backing & Stability
- Strategic Sectors Exposure
- Attractive Valuations
- Long-Term Growth Stories
Why Invest in PSU Stocks in 2025?
1. Government-Backed Stability
Most PSU companies are majority-owned by the Government of India, offering a layer of security to investors.
2. Attractive Valuations
PSU stocks often trade at a discount compared to their private sector peers, creating opportunities for value investing.
3. High Dividend Yields
Many PSU companies consistently offer high dividends, making them a favorite among income-focused investors.
4. Growth Through Reforms
With ongoing government reforms, privatization plans, and infrastructure push, PSUs are entering a new phase of growth.
Opportunities & Challenges
Opportunities
- India’s ₹11+ lakh crore infrastructure budget
- Increasing defence expenditure and indigenization
- Energy security via oil, gas, coal PSUs
- Privatization and asset monetization pipeline
Challenges
- Environmental pressure on fossil fuel companies
- Bureaucracy and slow decision-making
- Political interference
- Dependence on commodity prices (oil, coal)
Frequently Asked Questions (FAQs)
What are PSU stocks in India?
PSU (Public Sector Undertaking) stocks are shares of companies in which the Indian government holds a majority stake, typically more than 51%. These companies operate in strategic sectors such as banking, defence, energy, and infrastructure.
Are PSU stocks good for long-term investment?
Yes, PSU stocks can be good long-term investments if chosen carefully. Many PSUs offer stable earnings, consistent dividends, and benefit from government reforms. However, investors should also consider risks like policy interference and market volatility.
Which PSU stocks give the highest dividend?
Some of the top dividend-paying PSU stocks in 2025 include:
Coal India Ltd (~8% yield)
Power Grid Corporation (~5.5% yield)
ONGC (~6–7% yield)
Indian Oil Corporation (~6% yield)
Which PSU stocks are best for 2025?
Based on current performance and future potential, the best PSU stocks for 2025 include:
State Bank of India (SBI)
Bharat Electronics Limited (BEL)
NTPC Limited
Hindustan Aeronautics Limited (HAL)
GAIL (India) Ltd
Can I invest in PSU stocks through SIP or mutual funds?
Yes, you can invest in PSU-focused mutual funds or Exchange Traded Funds (ETFs) like:
1 .CPSE ETF
2. SBI PSU Fund
3. Nippon India PSU Fund
These are ideal for investors who want diversified exposure to PSUs.
How do I track PSU stock performance?
You can track PSU stocks through:
NSE & BSE websites
Stock market apps (like Groww, Zerodha, Upstox)
Company financials and quarterly results
News updates from government policies and budget announcements
Conclusion
Public Sector Undertakings (PSUs) have historically been viewed as conservative, slow-moving investments. But in 2025, the landscape is rapidly changing. With government-led reforms, strategic disinvestment plans, increased capital expenditure, and sectoral dominance — PSU stocks are now emerging as strong value and dividend plays.
Whether you’re a beginner or seasoned investor, PSU stocks offer:
Stability in volatile markets
Attractive dividend income
Undervalued opportunities with long-term upside
However, they are not without risks — including government influence, slow decision-making, and sectoral shifts. The key is to diversify across high-quality PSU companies and align your investment with long-term national growth trends like infrastructure, energy, defence, and digital banking.
If you’re building a 2025-ready portfolio, the right PSU stocks can add both strength and income to your investment journey.
