The government is a key player in the development of national wealth and economic stability. They have a hand in businesses like finance, coal, infrastructure, oil, power, banking, and more. In addition, they own and operate PSUs (Public Sector Undertakings) with the goal of social welfare in mind. These government-owned stocks are available for investment on the stock exchange.
What are Government Stocks?
Are you looking for some stocks that will help you diversify your portfolio to reduce the risk? Government shares are the most sought-after stocks to invest in India. They are the least risky investments and provide assured returns to investors even if they have underperformed for the last few years.
Government-listed companies are the companies whose stocks are traded on the stock exchange. They are traded in both the stock exchanges of India NSE and BSE. These government stock lists will always have a major stake in making the country and making the stock market more competitive. These companies will have a particular index in the stock exchanges such as NIFTY PSE, NIFTY PSU Bank, S&P BSE PSU, etc. These indexes constitute a list of government companies or PSUs and will track the performance of these stocks.
Thematic – PSU mutual funds will also invest in these stocks depending on which sector they are trying to invest in. They invest in these stocks to diversify their portfolio and minimize the risk.
Types of Government Companies in the Share Market
- CPSEs or Central Public Sector Enterprises
CPSEs are entities in which the central government or other CPSEs hold a stake of 51% or more. There are two types of CPSEs: Strategic CPSEs and Non-Strategic CPSEs. Strategic CPSEs include businesses related to military, defense, atomic energy, and railways. All other CPSEs are classified as Non-Strategic CPSEs.
- PSBs or Public Sector Banks
These are the banks, insurance, or financial institutions where the Central Government or another PSB owns at least 51% of the stake.
- SLPEs or State Level Public Enterprises
SLPEs are entities in which the state government or other SLPEs hold a stake of 51% or more.
Here is the list of top 5 Government stocks to buy in 2023
Life Insurance Corporation of India Limited
Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8 zonal offices, 1381 satellite offices and the corporate office. LIC’s Wide Area Network covers 113divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices.
Power Grid Corporation of India Limited
Power Grid Corporation of India Limited is an Indian central public sector undertaking under the ownership of Ministry of Power, Government of India. It is engaged mainly in transmission of bulk power across different states of India. It is headquartered in Gurugram. Power Grid transmits about 50% of the total power generated in India on its transmission network.
National Thermal Power Corporation Limited
NTPC Limited, formerly known as National Thermal Power Corporation Limited, is an Indian central public sector undertaking under the ownership of the Ministry of Power, Government of India which is engaged in generation of electricity and allied activities. The headquarters of the psu is situated at New Delhi. NTPC’s core function is the generation and distribution of electricity to State Electricity Boards in India. The body also undertakes consultancy and turnkey project contracts that involve engineering, project management, construction management, and operation and management of power plants.
Indian Railway Catering & Tourism Corporation
Indian Railway Catering and Tourism Corporation (IRCTC) is a wholly owned subsidiary of the Indian Railways, Ministry of Railways, Government of India. It provides ticketing, catering, and tourism services for the Indian Railways.
The IRCTC was established on 27 September 1999, as a public sector undertaking completely owned by the Government of India through the Indian Railways. It is the only entity that is authorised to provide certain services to the Indian Railways, including online ticketing, catering, and selling drinking water on trains and at railway stations. In May 2008, it was classed as a Miniratna public corporation, which allowed it a certain degree of financial autonomy.
Steel Authority of India
Steel Authority of India Limited (SAIL) is a central public sector undertaking based in New Delhi, India. It is under the ownership of Ministry of Steel, Government of India with an annual turnover of INR 1,03,480 Crore (US$13 billion) for fiscal year 2021–22. Incorporated on 24 January 1973, SAIL has 60,766 employees (as of 1 October 2022). With an annual production of 16.30 million metric tons, It is the largest government owned steel producer. The hot metal production capacity of the psu will further increase and is expected to reach a level of 50 million tonnes per annum by 2025.
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