Top 10 PSU Stocks By FII Shareholding

PSU stocks form the backbone of India’s economy, playing a pivotal role in various sectors ranging from energy to finance.

Among the various stakeholders in these entities, foreign institutional investors (FIIs) hold a significant share. This article delves into the top 10 PSU stocks in India based on FII shareholding, shedding light on the dynamics of FIIs, the structure and importance of PSU stocks, and an in-depth look at each of these top PSU stocks.

What are FIIs and Their Role in Public Markets?

Foreign Institutional Investors (FIIs) are investment funds or entities registered in a foreign country that invest in the financial markets of another country.

FIIs include mutual funds, hedge funds, insurance companies, pension funds, and investment banks. Their primary role in public markets is to provide liquidity, diversify the investor base and bring in foreign capital, which can drive economic growth.

By investing in emerging markets like India, especially in PSU stocks, FIIs not only seek high returns but also contribute to the development and stability of the financial markets.

What are PSU Stocks and Their Structure?

PSUs are government-owned corporations or state-owned enterprises created by the Government of India to undertake commercial activities on behalf of the government. PSU stocks can be wholly owned by the government or partially owned with a significant stake held by private investors or the public.

The structure of PSUs typically includes a board of directors appointed by the government, with oversight provided by various government ministries. PSU stocks play a critical role in key sectors such as energy, infrastructure, and finance, ensuring the country’s strategic interests are safeguarded.

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Top 10 PSU Stocks In India By FII Shareholding

1. Power Grid Corporation of India (29.82%)

Power Grid Corporation of India is a central transmission utility that operates the majority of India's interstate and inter-regional electric power transmission systems.

The company is crucial for ensuring the reliability, efficiency, and security of the power grid. Power Grid’s robust financials, strategic importance, and consistent performance make it an attractive investment for FIIs, who hold a 29.82% stake.

The company’s extensive network and role in transmitting power from various generating stations to distribution networks across India underline its importance. With India’s growing energy needs and government initiatives to strengthen the power infrastructure, Power Grid Corporation continues to attract significant foreign investment.

2. REC Ltd. (19.91%)

REC Ltd., formerly known as Rural Electrification Corporation Limited, is a leading public infrastructure finance company in India's power sector.

It provides financial assistance to state electricity boards, state governments, and private sector utilities for various power projects.

FIIs hold a 19.91% stake in REC Ltd., drawn by its stable revenue streams and essential role in India’s rural electrification drive. REC's strategic initiatives to support renewable energy projects and the government’s focus on expanding rural electrification make it a favoured choice among foreign investors.

3. NTPC Ltd. (17.86%)

NTPC Ltd., India's largest energy conglomerate, plays a crucial role in the power sector with a significant share in the country’s electricity generation. NTPC’s diversified portfolio includes thermal, hydro, solar and wind power projects.

The 17.86% FII holding in NTPC reflects confidence in its strong operational performance, government backing and strategic growth plans.

NTPC's focus on sustainable and renewable energy sources positions it well for future growth, aligning with global energy trends.

4. Bharat Electronics Ltd. (17.56%)

Bharat Electronics Ltd. (BEL) is a leading aerospace and defence company in India, catering to the needs of the Indian Armed Forces.

BEL’s product range includes radars, sonar, electronic warfare systems and communication equipment. With a 17.56% stake held by FIIs, BEL benefits from its strategic importance in national defence, robust order book and technological advancements.

The government’s push towards indigenisation and self-reliance in defence production further enhances BEL's investment appeal.

5. Power Finance Corporation (17.19%)

Power Finance Corporation (PFC) is a leading financial institution dedicated to financing the power sector in India. PFC provides financial assistance to power projects, including generation, transmission and distribution.

FIIs hold a 17.19% stake in PFC, attracted by its strong financial performance, strategic role in the power sector and steady income from loan repayments.

PFC's focus on renewable energy financing and the government's emphasis on power sector reforms ensure continued interest from foreign investors.

6. Bharat Petroleum Corporation Ltd. (16.79%)

Bharat Petroleum Corporation Ltd. (BPCL) is a major player in India's oil and gas sector, involved in the refining, distribution, and marketing of petroleum products. BPCL operates refineries, fuel stations, and a vast distribution network.

The 16.79% FII holding in BPCL is driven by its strategic significance in the energy sector, consistent profitability, and government initiatives like disinvestment plans.

BPCL’s focus on expanding its renewable energy portfolio also aligns with global energy transition trends, making it attractive to foreign investors.

7. Container Corporation of India (16.63%)

Container Corporation of India (CONCOR) is a leading logistics company specialising in container transportation and terminal operations.

CONCOR plays a vital role in India’s supply chain, offering multimodal logistics support.FIIs hold a 16.63% stake in CONCOR, reflecting confidence in its strategic importance in trade and logistics, strong financial performance and growth potential.

The government’s focus on improving logistics infrastructure and facilitating trade further boosts CONCOR's investment appeal.

8. GAIL (India) Ltd. (14.17%)

GAIL (India) Ltd. is the largest state-owned natural gas processing and distribution company in India. GAIL’s operations span natural gas transmission, LPG production, and petrochemicals.

The 14.17% FII holding in GAIL underscores its critical role in India’s energy security, robust infrastructure, and growth potential in the natural gas sector. GAIL's initiatives to expand its gas pipeline network and explore renewable energy projects enhance its attractiveness to foreign investors.

9. Hindustan Petroleum Corporation Ltd. (13.8%)

Hindustan Petroleum Corporation Ltd. (HPCL) is a major oil refining and marketing company in India, operating refineries and a vast network of fuel stations.

HPCL's product range includes petroleum, natural gas, and lubricants.FIIs hold a 13.8% stake in HPCL, drawn by its strategic role in the energy sector, consistent profitability, and growth potential. HPCL's focus on expanding its refining capacity and exploring renewable energy opportunities aligns with global energy trends, making it appealing to foreign investors.

10. NMDC Ltd. (12.6%)

Overview: NMDC Ltd. (National Mineral Development Corporation) is India’s largest iron ore producer and exporter, involved in the exploration and production of various minerals including iron ore, copper, limestone, dolomite, and gypsum.

FIIs hold 12.6% of NMDC’s shares. The PSU company's dominant position in the mining sector and its robust financial health attract significant foreign investment.

The significant FII holdings in these top 10 PSU stocks reflect the strategic importance, robust financials and growth potential of these entities.

FIIs play a crucial role in providing liquidity, diversifying the investor base, and bringing in foreign capital, which drives economic growth. The structure and stability of PSUs, coupled with their pivotal roles in various sectors, make them attractive investment opportunities for FIIs.

Here’s a list of the top 20 PSU stocks by foreign investor shareholding:

SNo.CompanyFII Shareholding (%)
1Power Grid Corp29.82
2REC Ltd19.91
3NTPC Ltd17.86
4Bharat Electronics17.56
5Power Finance Corp17.19
6Bharat Petroleum Corp16.79
7Container Corp16.63
8GAIL (India) Ltd.14.17
9Hindustan Petroleum13.8
11Hindustan Aeronautics12.42
12Bank of Baroda12.4
13State Bank of India11.09
14Canara Bank10.57
15Oil India Ltd.9.52
16National Aluminium Corp8.99
17Oil And Natural Gas Corp8.88
18Bharat Heavy Electricals Ltd8.76
19Indian Oil Corp8.49
20Coal India8.41
Data from Trendlyne

As India continues to develop its infrastructure and energy sectors, these PSU stocks are likely to remain at the forefront of FII investment strategies, contributing to the overall growth and stability of the Indian economy.

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