Want to invest in Government stocks? Invest in those with the largest market cap

Government stocks with the largest market cap

Government stocks with the largest market cap

The Indian Government owns multiple businesses engaged in different sectors like power, construction, electricity, banking, etc. Government-owned companies are called Public Sector Undertakings (PSUs), and many PSUs are listed on the Indian stock exchange.

Government stocks are considered less risky since they are backed by the Government. The chances of the company winding up a business are low. As such, these stocks can lend some stability to your portfolio.

There are three different types of government undertakings which are as follows –

  • Central Public Sector Enterprises (CPSE) wherein a minimum of 51% shares are held by the Central Government.
  • State Level Public Enterprises (SLPE) wherein a minimum of 51% shares are held by the State Government.
  • Public Sector Banks (PSB) are financial institutions wherein a minimum of 51% of shares are held either by the Central Government or another PSB.

Why invest in Government stocks?

Investment in government stocks proves beneficial, which is why such stocks are popular among investors. Here are the benefits –

1. Good returns
Government stocks have the potential to deliver attractive returns to investors.

2. Low risk
Since the companies are backed by the Central or the State Government, they pose a lower risk to investors.

3. Attractive dividend payout
Government companies give out attractive dividends to investors, creating a source of revenue for them.

4. Easy liquidity 
Government stocks are highly traded in the stock market. As such, you can easily liquidate your holdings whenever you want.

5. Portfolio diversification
Government stocks offer portfolio diversification as you can invest in different sectors and mitigate investment risks.

Related - Check out the top 5 monopoly stocks in India

Government stocks with the largest market cap

There are multiple government companies in India. Among them, the companies that have the largest market capitalization as of 21st November 2022 are as follows –

Government stocks with the largest market cap

The bottom line

You can invest in these stocks directly, through the stock exchange, or through PSU mutual funds, which are also available in the market. Mutual funds offer you a diversified basket of government stocks and are managed professionally. Mutual funds will be a good choice if you want a readymade portfolio of government stocks.

So, assess your investment needs and then make an informed choice.

Related - Here's a guide to investing in Government bonds

Check out the video to know five companies in which the government is disinvesting its stake 


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