Top 7 PSU Stocks Under ₹100 to Buy in January 2025

For investors looking to explore government-backed, stable, and affordable stocks, Top 7 PSU Stocks Under ₹100 to Buy in January 2025 offer great opportunities. Public Sector Undertakings (PSUs) like Indian Overseas Bank, NHPC Ltd, UCO Bank, Central Bank of India, Bank of Maharashtra Ltd, Punjab & Sind Bank, and NBCC India Ltd stand out for their potential growth and stability, making them attractive picks for the coming year.

Indian Overseas Bank (IOB) is a well-established player in the banking sector with strong recovery prospects. It stands out as a stable choice for investors seeking consistent returns, benefiting from government reforms in the banking space. NHPC Ltd, a leading hydropower company, plays a crucial role in India’s renewable energy ambitions, offering steady growth with ongoing projects that align with India’s green energy goals.

UCO Bank, despite past challenges, is showing signs of recovery, making it an attractive option for those interested in the public banking sector. Central Bank of India, with its large customer base and growing market share, offers strong dividend yields and potential for growth, especially as the banking sector continues to recover. Bank of Maharashtra Ltd, with its improving asset quality and strengthening balance sheet, presents a solid investment opportunity at an affordable price under ₹100.

Punjab & Sind Bank remains a reliable choice in the banking sector, focusing on expanding its reach across India with consistent growth. Finally, NBCC India Ltd, a government-owned infrastructure company, continues to make significant strides in urban development projects, providing strong growth prospects in the long term.

These PSU stocks offer investors a unique opportunity to invest in government-backed companies with stable earnings potential, making them excellent picks for January 2025 for those looking for value and growth at affordable prices.

List of Top 7 PSU Stocks Under ₹100 to Buy in January 2025

PSU Stocks	LTP (₹)	Volume	Market Cap (Cr)	PE Ratio	52 week High	52 week Low
Indian Overseas Bank	53.02	33,38,263	98,822	33.30	83.75	38.95
NHPC Ltd	81.23	1,27,25,918	82,831	27.76	118.40	53.65
UCO Bank	43.81	42,75,132	52,941	24.07	70.65	36.75
Central Bank of India	56.07	48,18,135	49,386	14.44	76.90	43.60
Bank of Maharashtra Ltd	55.17	1,05,17,132	41,773	8.53	73.50	42.85
Punjab & Sind Bank	48.89	5,88,104	33,076	48.80	77.50	40.15
NBCC India Ltd	94.55	43,14,123	25,574	54.13	139.83	42.53

Disclaimer:

The information provided in this blog post is for informational purposes only and should not be construed as financial or investment advice. The stocks mentioned, including Indian Overseas Bank, NHPC Ltd, UCO Bank, Central Bank of India, Bank of Maharashtra Ltd, Punjab & Sind Bank, and NBCC India Ltd, are subject to market risks and fluctuations. Past performance is not indicative of future results.

Before making any investment decisions, it is advisable to consult with a qualified financial advisor or conduct thorough research. The author and the website do not bear any responsibility for any financial losses or gains that may arise from acting upon the information provided herein. Always assess your risk tolerance and financial goals before investing in the stock market.

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Public Sector Undertakings (PSUs) are an essential part of the Indian economy, and investing in their stocks has been a favored strategy for many investors looking to capitalize on government-backed companies. Below are the Top 7 PSU Stocks Under ₹100 to Buy in January 2025 that offer strong growth potential and long-term stability:

1. Indian Overseas Bank (IOB)

Established in 1937, Indian Overseas Bank is one of India’s major public sector banks with a network of branches across the country. Known for its financial services to retail and corporate clients, IOB provides a wide range of banking products, including loans, savings accounts, and investment services.

2. NHPC Ltd

NHPC (National Hydroelectric Power Corporation) is a public sector hydropower generation company in India, which has been a pioneer in the renewable energy sector. It owns and operates hydroelectric power plants across India, contributing significantly to the country’s electricity generation capacity.

3. UCO Bank

UCO Bank, founded in 1943, offers financial services to individual, business, and corporate clients. It has a large branch network and provides services like personal banking, corporate banking, and loan facilities.

4. Central Bank of India

As one of the oldest banks in India, Central Bank of India has been providing banking services for over 100 years. The bank offers a range of services, including retail, corporate, and wealth management products, and operates across India with a strong focus on rural areas.

5. Bank of Maharashtra Ltd

Bank of Maharashtra is a major public sector bank that focuses on providing affordable banking services, especially in the rural and semi-urban regions. With a wide range of products, it plays an essential role in financial inclusion.

6. Punjab & Sind Bank

Founded in 1908, Punjab & Sind Bank is known for its specialized services to small and medium enterprises (SMEs), as well as its focus on social banking. The bank has a strong presence in northern India.

7. NBCC India Ltd

NBCC (India) Ltd is a public sector enterprise under the Ministry of Housing and Urban Affairs. It is primarily involved in construction and project management services. The company is known for its work in residential, commercial, and institutional building projects.

What are PSU Stocks?

PSU stocks refer to shares of Public Sector Undertakings—companies in which the government holds a significant stake (typically more than 51%). These companies operate in various sectors such as banking, energy, mining, construction, and more. They are seen as more stable investments since they are government-backed, often paying regular dividends and contributing to the country’s economic growth.

Categorization of PSUs in India

In India, PSUs are generally categorized based on their ownership, activities, and size:

1. Central Public Sector Enterprises (CPSEs): These are public sector companies where the central government holds a majority stake.
2. State Public Sector Enterprises (SPSEs): These are companies owned by state governments.
3. Maharatna, Navratna, and Miniratna: These are classifications of CPSEs based on their financial performance and capabilities:
   • Maharatna: The largest, most financially powerful PSUs (e.g., ONGC, NTPC).
   • Navratna: PSUs with significant autonomy but not as large as Maharatnas (e.g., Hindustan Zinc).
   • Miniratna: Smaller PSUs with limited powers (e.g., Power Grid Corporation).

Features of PSU Stocks in India

• Government Backing: PSUs are owned by the government, offering greater stability compared to private companies.
• Regular Dividends: Many PSU companies offer consistent dividend payouts, making them attractive to income-seeking investors.
• Stable Returns: Given the government’s involvement, PSU stocks tend to be less volatile.
• Growth Potential: While not as fast-growing as some private sector companies, many PSUs have strong growth prospects, particularly those in the infrastructure, banking, and energy sectors.
• Liquidity: PSU stocks are traded on major stock exchanges, ensuring high liquidity.

How to Choose the Best PSU Stocks to Invest In?

When selecting PSU stocks, consider the following factors:

1. Company Fundamentals: Analyze the company’s financial health, including profit margins, revenue growth, and debt-to-equity ratio.
2. Sector and Industry Growth: Choose PSUs from sectors that are expected to grow, such as renewable energy, infrastructure, and banking.
3. Government Support: Evaluate the level of government support and the company’s importance to national infrastructure and development.
4. Dividends: Look for PSUs with a history of regular dividend payments.
5. Valuation: Compare the stock’s current price to its intrinsic value and industry peers.

Advantages of Investing in PSU Stocks

1. Government Backing: Being government-owned, these stocks are often seen as less risky than private companies.
2. Stability: PSU stocks are typically less volatile, making them a good choice for risk-averse investors.
3. Regular Dividends: Many PSUs offer stable and attractive dividend yields, making them a good choice for income investors.
4. Potential for Growth: Many PSUs are integral to India’s economy, especially in sectors like energy, infrastructure, and banking, which are crucial for the country’s development.
5. Long-Term Value: With their stability and consistent performance, PSU stocks are ideal for long-term investments.

Risks of Investing in PSU Stocks

1. Government Control: The level of government involvement in decision-making can sometimes lead to inefficiencies or delays in business operations.
2. Lower Growth Potential: While PSU stocks are stable, they may not offer the same high growth potential as private sector stocks.
3. Political Risks: Changes in government policies or leadership can affect the performance and direction of PSU companies.
4. Bureaucratic Processes: PSUs often operate under strict regulatory and bureaucratic frameworks, which can slow decision-making or hinder innovation.

Factors to Consider Before Investing in PSU Stocks

1. Company’s Financial Health: Review balance sheets, profit and loss statements, and cash flow to understand the company’s financial health.
2. Government Influence: Consider how much control the government has over the company and how it impacts decision-making.
3. Growth Prospects: Assess whether the company is likely to grow, especially in sectors like infrastructure or renewable energy.
4. Dividend History: If you’re an income investor, check the company’s dividend payout record.
5. Economic and Political Environment: Keep an eye on the government’s stance on key sectors like banking, energy, and construction, as these will influence PSU performance.

Conclusion

PSU stocks offer a safe investment avenue, especially for risk-averse investors looking for stability and consistent returns. The 7 best PSU stocks listed above—Indian Overseas Bank, NHPC Ltd, UCO Bank, Central Bank of India, Bank of Maharashtra Ltd, Punjab & Sind Bank, and NBCC India Ltd—present good opportunities for growth in 2025. As with any investment, due diligence and careful consideration of the risks are crucial to making informed decisions.

FAQs for PSU Stocks in India