Top 10 Best Government Company Stocks in India by Market Cap

Investing in government company stocks, or Public Sector Undertakings (PSUs), is a great choice for investors looking for stability and consistent returns. These companies are supported by the central or state governments, making them a trusted investment in important sectors like energy, finance, and infrastructure. These companies often dominate their respective sectors, benefit from government backing, and provide consistent dividends. In this blog, we’ll list the top 10 best government company stocks in India based on their market capitalisation. These companies are leaders in their industries, have strong financials and the potential for long-term growth and are great options for investors.

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What is a Government Company?

A  company that has at least 51% of its shares owned by the government is known as a government company. This indicates that the national government, a state government, or both, mostly controls the business. Even though it operates like any other company, government regulations often affect its choices. State Trading Corporation (STC) and the Steel Authority of India (SAIL) are two instances of government-owned businesses. These businesses are important because they supply goods and services that keep the economy of the country functioning.

Also read: Top 10 Most Valuable Companies in India by Market Cap in 2024

What is Public Sector Undertaking(PSU) Company?

In India, a Public Sector Undertaking (PSU) is a business that is owned by the government. The national or state governments may hold all or a portion of these organizations. A PSU is referred to as a Central Public Sector Undertaking (CPSU) when it is owned by the central government and as a State Level Public Sector Undertaking (SLPSU) when it is owned by the state governments. PSUs are important to the nation’s economy in a number of areas, including infrastructure, mining, and energy. They additionally make sure that important industries and services remain to be governed by the government.

Also read: Top 10 Banks in India in 2024 by Market Cap

Types of Government Companies in the Share Market 

• Central Public Sector Undertakings (CPSUs/CPSEs): These are organizations where at least 51% of the shares are owned by the national government. They work in both non-strategic and strategic areas, such as defence.
• Public Sector Banks (PSBs): India has several government owned banks, most of them are listed on stock exchanges.
• State-Level Public Enterprises: These are companies where a state government has a majority stake. While fewer in number, examples include Gujarat State Petronet Ltd and Orissa Minerals Development Company.

Also read: Top 10 Green Energy Company Stock in India by Market Capitalisation

Key Details of Top 10 Government Company Stocks in India

1. ONGC Ltd.

ONGC is India’s largest oil and gas exploration and production company. It plays a crucial role in meeting the country’s energy demands and has consistently been a major player in the global oil market. The company’s vast reserves and ongoing exploration efforts ensure its dominance in the energy sector. The company is also an important player in the refining industry through its subsidiaries, HPCL and MRPL, and its arm, ONGC Videsh Ltd, manages oil and gas blocks in more than a dozen nations.

2. NTPC Ltd.

NTPC is India’s largest power utility, responsible for about a quarter of the country’s total electricity generation. With 73,874 MW of capacity, it is primarily made up of gas and coal-fired power stations. The company is also expanding into renewable energy, aiming to balance its fossil fuel-heavy portfolio with greener alternatives. But by 2032, it wants to increase the percentage of its portfolio that is generated without the use of fossil fuels to about 50%.

3. BPCL Ltd.

One of the two main PSUs involved in refining in India, after Indian Oil Corp., is BPCL. In the process of running more than 20,000 gas stations around India, it also has three sizable refineries in Mumbai, Kochi, and Bina (Madhya Pradesh). The company’s extensive network of fuel stations and its focus on customer service make it a key player in the energy sector. The government has been considering privatizing the corporation.

Also read: Top 10 FMCG Companies in India by Market Cap in 2024

4. Bharat Electronics Ltd.

Founded in 1954, Bharat Electronics Limited (BEL) is one of India’s top public sector companies with a primary emphasis on defence electronics. Electronic warfare systems, radars, and communication devices are just a few of the defence equipment products that BEL manufactures. BEL operates in telecom, e-governance, cybersecurity, and railroads along with defence. They collaborate with several businesses to develop goods including missile systems and electronic voting machines. In addition, it provides the private sector with software, cybersecurity, and electronic manufacturing services.

5. Coal India Ltd.

Coal India is the world’s largest coal-producing company, supplying a significant portion of India’s energy needs. Over 300 mines are run by Coal India and its subsidiaries throughout India, producing close to 700 million tonnes of coal a year. The company’s dominance in the coal sector ensures its importance in India’s energy mix, despite the global shift towards renewable energy.

6. Power Grid Corp of India Ltd.

Power Grid is the central transmission utility of India, managing the bulk of the country’s power transmission infrastructure. It manages hundreds of substations and millions of kilometers of transmission lines. In addition, it offers consulting services to around two dozen nations globally and has a telecom network.

Also read: Top 10 Defence Company Stock in India 2024 by Market Capitalisation

7. Power Finance Corporation (PFC)

The financial engine of India’s power industry is provided by Power Finance Corporation(PFC( and its subsidiaries Rural Electrification Corp. For projects involving generation, transmission, distribution, and system enhancement, the two non-banking financial firms provide loans and consulting services to state and central power utilities, private sector developers, and state governments.

8. Hindustan Aeronautics Ltd.

Founded in 1940 and headquartered in Bangalore, Hindustan Aeronautics Limited (HAL) is one of India’s leading aerospace and defence companies. It is major name in the top 10 defence company stock in India by market capitalisation. HAL creates, constructs, and maintains airplanes, helicopters, and associated systems. They manufacture the Light Combat Aircraft, the Dhruv Helicopter, and the Su-30 MKI Fighter Jet. HAL also produces communication and navigation systems for airplanes.

9. Indian Railway Catering and Tourism Corporation

The state-owned Indian Railways are served by the Indian Railway Catering and Tourism Corporation (IRCTC), which also handles ticketing. The Railway Ministry oversees its operations, and it was established in 1999. October 2019 marked the company’s IPO launch. Its market valuation has since increased from Rs 5,120 crore to around Rs 80,000 crore.

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10. Indian Railway Finance Corp (IRFC)

Indian Railway Finance Corporation (IRFC) is the dedicated financing arm of the Indian Railways, established in 1986. It plays a crucial role in funding the acquisition of rolling stock, as well as railway infrastructure projects, by raising funds through various debt instruments. IRFC’s strong credit profile, backed by the government, and its critical role in supporting the growth and modernization of Indian Railways make it an attractive option for investors seeking stability and steady returns in the infrastructure sector.

Wrapping up 

Investing in government company stocks offers stability and potential for long-term growth, backed by the credibility of state ownership. These top 10 PSUs represent the best of what India has to offer in terms of market capitalization, sectoral dominance, and future growth potential. Whether you are a seasoned investor or just starting out, these stocks should be on your radar for building a robust and diversified portfolio.

Also read: 

• Best SIP to Invest in 2024 – Top 10 SIP Mutual Fund Plans for NRIs/OCIs
• 10 Mutual Funds that Doubled Investor’s Wealth in 3 Years

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Disclaimer: This blog has been written exclusively for educational purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. SBNRI does not intend to predict future returns, please read all related documents before investing.

FAQs

Which government stock is best in India? 

Top three of the best government stocks to consider in India include:

• ONGC Ltd – A leading oil and gas exploration company.
• NTPC Ltd – A major player in power generation.
• Bharat Petroleum Corp Ltd (BPCL)- A key company in the petroleum and refining sector.

Which is the No 1 government company in India? 

Indian Oil Corporation Limited (IOCL) is the No. 1 government company in India in terms of revenue. It is the largest public sector enterprise in the country, playing a key role in the oil and gas industry.

Which government share is best for the long term under 100? 

The top PSU stocks under ₹100 in India that are considered good for long-term investment include:

• Indian Overseas Bank
• Central Bank of India Ltd
• MMTC Ltd
• Bank of Maharashtra Ltd
• Punjab & Sind Bank

Which sector will grow in 2024? 

In 2024, several sectors in India are expected to experience significant growth, including:

• Agriculture and Allied Industries
• Auto Components
• Aviation