Ruchi SrivastavaPSU Banks or public sector undertaking banks have a pivotal role to play in shaping India’s financial system. It represents investment opportunities in companies where the Indian government holds a majority stake of at least 51%. These companies are key contributors to driving economic growth and development.
PSU companies operate across key sectors such as energy, infrastructure, insurance, banking, and more. PSU stocks were seen as appealing investment options due to factors like stability, consistent dividend earnings, and other benefits.
This Blog provides a detailed overview of all PSU bank stocks in India, highlighting their economic significance and stock market presence.
What are PSU Bank Stocks?
PSU bank stocks represent shares of Public Sector Undertaking (PSU) banks, where the Indian government holds a majority stake. These banks play a crucial role in driving India’s economy by financing infrastructure projects, agriculture, and public welfare initiatives. Backed by government support, they are often considered more stable and reliable, particularly for long-term investors.
For those seeking steady growth with lower risk, investing in PSU bank stocks can be a smart choice. These shares offer stability and the potential for dividends, making them an attractive option for balancing risk in investment portfolios. Additionally, with ongoing government efforts to modernize and strengthen these banks, PSU stocks present promising growth opportunities. Some of the prominent PSU banks in India include:
- State Bank of India (SBI)
- Punjab National Bank (PNB)
- Bank of Baroda (BoB)
- Canara Bank
- Union Bank of India
List of PSU Bank Stocks to Invest in India 2025
| SCRIP | BSE PRICE(Rs) | NSE PRICE(Rs) | CHART | MORE INFO |
| BANK OF BARODA | 222.25 -0.76% | 222.14 -0.71% | More Info | |
| BANK OF INDIA | 96.10 1.48% | 96.02 1.48% | More Info | |
| BANK OF MAHARASHTRA | 51.20 -2.98% | 51.10 -3.11% | More Info | |
| CANARA BANK | 94.75 1.66% | 94.75 1.64% | More Info | |
| CENTRAL BANK | 51.50 -7.22% | 51.50 -6.94% | More Info | |
| IDBI BANK | 73.20 -5.76% | 73.19 -6.05% | More Info | |
| INDIAN BANK | 502.95 -0.79% | 503.00 -0.55% | More Info | |
| INDIAN OVERSEAS BANK | 50.03 -7.54% | 49.94 -7.12% | More Info | |
| NIFTY 50 | Not Listed | 23,228.10 0.22% | More Info | |
| PNB | 98.15 -0.46% | 98.26 -0.15% | More Info | |
| PUNJAB & SIND BANK | 46.29 -2.98% | 46.15 -4.03% | More Info | |
| S&P BSE BANKEX | 55,327.97 0.08% | Not Listed | More Info | |
| S&P BSE SENSEX | 76,724.08 0.29% | Not Listed | More Info | |
| SBI | 755.00 0.92% | 754.20 0.81% | More Info | |
| UCO BANK | 42.50 -6.49% | 42.40 -6.34% | More Info | |
| UNION BANK | 106.15 1.92% | 106.24 2.08% | More Info |
The S&P BSE BANKEX Index stood at 55,328.0, showing a slight increase of 0.1%. Over the past 30 days, the index has dropped by 9.3%, but it has gained 2.0% in the last year.
Among public sector (PSU) banks, UNION BANK rose by 1.9%, and CANARA BANK gained 1.7%, making them the top performers. In contrast, INDIAN OVERSEAS BANK fell by 7.5%, and CENTRAL BANK declined by 7.2%, leading to losses.
Meanwhile, the S&P BSE SENSEX, the benchmark index, was at 76,724.1, up by 0.3%.
Upcoming Quarterly Results for PSU Bank Stocks
| COMPANY | PRICE (Rs) | CHANGE (%) | RESULT DATE |
| BANK OF MAHARASHTRA | 51.20 | -2.98 | 15-Jan-25 |
| PUNJAB & SIND BANK | 46.29 | -2.98 | 15-Jan-25 |
| CENTRAL BANK | 51.50 | -7.22 | 20-Jan-25 |
| IDBI BANK | 73.20 | -5.76 | 20-Jan-25 |
Check here for the Complete list of Upcoming Quarterly Results
Benefits of Investing in PSU Bank Stocks
1. Dividend Yields: PSU banks frequently provide high dividend yields, making them a popular choice for income-oriented investors.
2. Affordable Valuations: These banks typically trade at lower Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios compared to private banks.
3. Government Backing: Strong government support ensures stability, even during economic challenges.
4. Growth Opportunities: The push for digitization and financial inclusion creates significant potential for future growth.
Risks of Investing in PSU Bank Stocks
- High Non-Performing Assets (NPAs): The sector has faced challenges with high bad loan levels, which affect profitability.
- Lower Operational Efficiency: PSU banks tend to perform less efficiently compared to private banks in terms of operational metrics.
- Market Perception: The sector is often seen as lagging behind due to slower innovation and bureaucratic processes.
- Dependence on Government Policy: Frequent government involvement may restrict the banks’ operational independence.
- Delayed Technological Adoption: PSU banks tend to adopt new technologies at a slower pace, which can affect their ability to stay competitive in the rapidly changing banking industry.
Current Market Scenario for PSU Bank Stocks in 2025
PSU bank stocks surged on Tuesday afternoon, driven by an 18% increase in Central Bank of India shares, following news that the government has approved a Rs 10,000 crore Qualified Institutional Placement (QIP) plan for five state-owned banks.
Punjab and Sind Bank, Indian Overseas Bank, UCO Bank, Central Bank, and Bank of Maharashtra have been cleared to raise up to Rs 2,000 crore each. According to ET Now, the fund-raising process will start in smaller phases from Q4.
1. Government Mandate: The Department of Investment and Public Asset Management (DIPAM) has been instructed to sell stakes in five PSU banks through the Offer for Sale (OFS) method.
2. Market Impact: Following this announcement, the Nifty PSU Bank index rose by 4%, with Central Bank, Indian Overseas Bank, UCO Bank, Bank of Maharashtra, and Punjab & Sind Bank all seeing gains of at least 10%.
3. SBI Performance: Shares of SBI, India’s largest lender, increased by about 2.5%.
4. Government Ownership: As of the end of September, the Indian government holds:
- Over 93% of the Central Bank of India
- 96.4% of Indian Overseas Bank
- 95.4% in UCO Bank
- 98.3% in Punjab & Sind Bank (according to BSE data)
5. SEBI Regulations: The Securities and Exchange Board of India (SEBI) mandates that listed companies maintain a 25% public shareholding. However, government-owned firms are exempt from this rule until August 2026.
6. Past QIPs: Public sector banks have used Qualified Institutional Placements (QIPs) to raise capital, reducing the government’s stake.
Final Thoughts
PSU bank stocks in India provide a combination of stability and growth opportunities, though they carry certain risks. By thoroughly evaluating financial indicators, industry trends, and government policies, investors can make well-informed choices. Although these stocks may not be ideal for every risk profile, they can play a crucial role in a diversified portfolio aimed at long-term wealth building.
Source – PSU bank stocks rally up to 18%. What’s the good news?
