by The government is strategically reducing its stake in public sector undertakings (PSUs) to raise capital and enhance efficiency. This tactical measure also attracts private investment, which makes the stocks attractive to investors.
If you are eyeing such opportunities in the stock market, we have presented 5 PSUs that stand out as potential vehicles for growth. In this article, we will evaluate five prominent PSUs that you must watch out for as India propels towards its privatization goals.
Top PSU Stocks to Check Out For High Growth Potential
PSUs have been a top choice for investors. For example, check the share price of State Bank of India, which is around Rs. 800+ at present, up from Rs. 570+ in November 2023.
On the same line, we have curated five PSU stocks you might consider including in your portfolio.
1. IDBI Bank
IDBI Bank is one of the most significant players in the banking sector of India. The government is considering its privatization to be of top priority. The sale involves nearly 61% of the stake, which involves both the government and LIC, which can significantly change the operational dynamics of the bank.
In recent months, investors have shown interest in the shares of IDBI Bank, which reflects their positive sentiment. Once the process of privatization is completed, the bank could become more competitive, providing handsome returns to investors.
2. NMDC Steel
NMDC Steel Ltd. is a subsidiary of the National Mineral Development Corporation (NMDC). As a part of the government’s broader disinvestment strategy, it is set for privatization.
Once the Nagarnar steel plant in Chhattisgarh is privatized, it is likely to generate substantial revenue. This strategic move may also increase the steel production capacity of NMDC and streamline operations.
The financial bids are expected before FY25, which makes NMDC Steel Ltd a stock to closely monitor. If the sale is successful, the valuation of the company is likely to get a boost which will improve the performance of the stock.
3. Shipping Corporation of India (SCI)
The Shipping Corporation of India (SCI) is another stock to watch out for privatization. The Maharashtra government has recently approved a crucial stamp duty waiver, removing a significant hurdle in the strategic sale of SCI.
This has significantly pushed the share price of the stock. Also, the demerger of its non-core assets into a separate entity has allowed SCI to focus on its core shipping operations.
As the process of divestment shapes up, SCI is all set for better operational efficiency. This makes it an attractive prospect for investors looking to explore sectors like logistics and maritime.
4. Container Corporation of India (Concor)
Concor is a key player in the logistics and transportation industry of India, which the government is likely to privatize. Currently, the privatization process has been temporarily paused. The government wants to make sure that the process aligns with the economic goals of the country.
The privatization, if successful, is likely to significantly improve its efficiency. As an investor, keep an eye on Concor as the logistics sector remains a top priority for the country’s infrastructure growth.
5. Rashtriya Ispat Nigam Limited (RINL)
RNPL, which operates the Vizag Steel Plant, is another PSU likely to be privatized. The High Court has requested updates from the management of the company on land sales. However, certain legal hurdles are currently holding up the privatization process.
The outcome of this case will largely determine the future of RINL and its potential impact on the steel market.
Conclusion
PSU stocks bring you a lucrative opportunity to grow your wealth as India pushes forward with its privatization goals. The five stocks we recommended in this blog are from various sectors, and their fundamentals look strong. Early investments in these PSU stocks can help you ride the growth trajectory that the companies promise.
