The table below shows the Best Government Stocks based on Market Capitalization.
| Stock Name | Market Cap (In Cr) | Close Price (₹) | 1Y Return (%) |
| State Bank of India | 749,132.61 | 839.4 | 48.71 |
| Life Insurance Corporation of India | 573,803.79 | 916.3 | 34.54 |
| Power Grid Corporation of India Ltd | 315,104.46 | 339.25 | 61.39 |
| Hindustan Aeronautics Ltd | 291,890.19 | 4,474.65 | 90.84 |
| Coal India Ltd | 253,596.27 | 417.15 | 20.34 |
| Bharat Electronics Ltd | 217,758.31 | 307.35 | 110.83 |
| Indian Oil Corporation Ltd | 193,404.48 | 139 | 26.58 |
| Bank of Baroda Ltd | 127,991.21 | 246.45 | 25.92 |
| Bharat Petroleum Corporation Ltd | 127,486.98 | 293.45 | 38.45 |
| Punjab National Bank | 120,802.33 | 104.38 | 32.54 |
Table of Contents
Introduction to List of Government Stocks in India
State Bank of India
The State Bank of India is a banking and financial services provider headquartered in India. The company offers a diverse range of products and services to individuals, commercial enterprises, corporations, public bodies and institutional customers.
Its operations are divided into segments such as Treasury, Corporate/Wholesale Banking, Retail Banking, Insurance Business and Other Banking Business. The Treasury segment focuses on investment and trading in foreign exchange and derivative contracts. The Corporate/Wholesale Banking segment includes lending activities for corporate accounts, commercial clients and stressed assets resolution.
- Market Cap: ₹ 7,49,132.61 Crore
- Close Price: ₹ 839.40
- 1Y Return: 48.71%
- 1M Return: 6.80%
- 6M Return: 0.68%
- 5Y Average Net Profit Margin: 8.58%
- Dividend Yield: 1.63%
- 5Y CAGR: 19.56%
- Sector: Public Banks
Life Insurance Corporation Of India
Life Insurance Corporation of India (LIC) is an insurance company headquartered in India that provides life insurance services both domestically and internationally. LIC offers a variety of insurance solutions for individuals and groups, including participating, non-participating and unit-linked options.
The company’s product portfolio includes a range of insurance and investment products such as protection, pension, savings, investment, annuity, health and variable products. LIC is organized into different segments such as Life Individual, Participating Pension Individual, Participating Annuity Individual, Non-Participating Life, Non-Participating Pension, Non-Participating Health Individual and Non-Participating Unit Linked. LIC offers around 44 products, consisting of 33 individual products and 11 group products.
- Market Cap: ₹ 5,73,803.79 Crore
- Close Price: ₹ 916.30
- 1Y Return: 34.54%
- 1M Return: 0.00%
- 6M Return: -11.56%
- 5Y Average Net Profit Margin: 2.14%
- Dividend Yield: 1.10%
- 5Y CAGR: N/A
- Sector: Insurance
Hindustan Aeronautics Ltd
Hindustan Aeronautics Limited, an India-based company, is involved in various activities such as designing, developing, manufacturing, repairing, overhauling, upgrading and servicing a wide array of products including aircraft, helicopters, aero-engines, avionics, accessories and aerospace structures.
Avionics products offered by the company encompass inertial navigation systems, auto stabilizers, head-up displays, laser range systems, flight data recorders, communication equipment, radio navigation equipment, onboard secondary radars, missile inertial navigation, radar computers and ground radar systems.
- Market Cap: ₹ 2,91,890.19 Crore
- Close Price: ₹ 4,474.65
- 1Y Return: 90.84%
- 1M Return: 4.38%
- 6M Return: -15.13%
- 5Y Average Net Profit Margin: 18.19%
- Dividend Yield: 0.80%
- 5Y CAGR: 63.11%
- Sector: Aerospace & Defense Equipments
Power Grid Corporation of India Ltd
The Power Grid Corporation of India Limited is a power transmission company that focuses on the planning, implementation, operation and maintenance of the Inter-State Transmission System (ISTS), as well as providing telecom and consulting services. The company has three main segments: Transmission Services, Consulting Services and Telecom Services.
Within Transmission Services, the company is responsible for transmitting bulk power across different states of India through extra high voltage/high voltage (EHV/HV) networks. The Consulting Services segment offers a wide range of consultancy services in the transmission, distribution and telecom sectors, including planning, design, engineering, procurement management, operation and maintenance, financing and project management.
- Market Cap: ₹ 3,15,104.46 Crore
- Close Price: ₹ 339.25
- 1Y Return: 61.39%
- 1M Return: 7.32%
- 6M Return: 6.70%
- 5Y Average Net Profit Margin: 31.67%
- Dividend Yield: 3.32%
- 5Y CAGR: 25.32%
- Sector: Power Transmission & Distribution
Coal India Ltd
Coal India Ltd., an Indian coal mining company, operates in 83 mining areas across eight states in India through its subsidiaries. The company oversees a total of 322 mines, comprising 138 underground, 171 opencast and 13 mixed mines, as well as various facilities like workshops and hospitals.
Additionally, Coal India Ltd. has 21 training Institutes and 76 Vocational Training Centers. The company also runs the Indian Institute of Coal Management (IICM), a corporate training institute offering multi-disciplinary programs.
- Market Cap: ₹ 2,53,596.27 Crore
- Close Price: ₹ 417.15
- 1Y Return: 20.34%
- 1M Return: -9.01%
- 6M Return: -16.78%
- 5Y Average Net Profit Margin: 18.38%
- Dividend Yield: 6.20%
- 5Y CAGR: 15.72%
- Sector: Mining – Coal
Indian Oil Corporation Ltd
Indian Oil Corporation Limited is an oil company based in India that operates in various segments including Petroleum Products, Petrochemicals and Other Business Activities. The Other Business Activities segment encompasses gas, oil and gas exploration, explosives and cryogenic business, as well as windmill and solar power generation.
The company is involved in the entire hydrocarbon value chain, from refining and pipeline transportation to marketing, exploration, production of crude oil and gas, petrochemicals, gas marketing, alternative energy sources and global downstream operations. It has a wide network of fuel stations, storage terminals, depots, aviation fuel stations, LPG bottling plants and lube blending plants.
- Market Cap: ₹ 1,93,404.48 Crore
- Close Price: ₹ 139.00
- 1Y Return: 26.58%
- 1M Return: -7.66%
- 6M Return: -17.70%
- 5Y Average Net Profit Margin: 3.26%
- Dividend Yield: 8.54%
- 5Y CAGR: 9.72%
- Sector: Oil & Gas – Refining & Marketing
Bharat Electronics Ltd
The Market Cap of Bharat Electronics Ltd is Rs. 207,305.33 crores. The stock’s monthly return is -0.65%. Its one-year return stands at 105.06%. The stock is currently 20.06% away from its 52-week high.
Bharat Electronics Limited, headquartered in India, specializes in manufacturing and supplying electronic equipment and systems for both defence and non-defense markets. The company’s defence product range includes navigation systems, communication products, radars, naval systems, electronic warfare systems, avionics, electro-optics, tank and armoured fighting vehicle electronic systems, weapon systems, simulators and more.
In the non-defence sector, the company offers products and services such as cyber security, e-mobility, railway systems, e-governance systems, homeland security, civilian radars, turnkey projects, components/devices and telecom and broadcast systems.
- Market Cap: ₹ 2,17,758.31 Crore
- Close Price: ₹ 307.35
- 1Y Return: 110.83%
- 1M Return: 7.68%
- 6M Return: 1.17%
- 5Y Average Net Profit Margin: 15.94%
- Dividend Yield: 0.74%
- 5Y CAGR: 55.00%
- Sector: Electronic Equipments
Bharat Petroleum Corporation Ltd
Bharat Petroleum Corporation Limited, an Indian company, is engaged in the production, refining and distribution of petroleum products. Its diverse business portfolio encompasses fuel services, Bharatgas, MAK Lubricants, refineries, gas operations, industrial and commercial solutions, international trade and proficiency testing services.
Bharatgas aims to provide comprehensive solutions and support for businesses seeking energy-related products, ensuring quality and reliability. The company delivers a range of high-quality products such as automotive engine oils, gear oils, transmission oils and speciality oils. Its refining segment includes Mumbai Refinery, Kochi Refinery and Bina Refinery.
- Market Cap: ₹ 1,27,486.98 Crore
- Close Price: ₹ 293.45
- 1Y Return: 38.45%
- 1M Return: -4.21%
- 6M Return: -10.42%
- 5Y Average Net Profit Margin: 3.52%
- Dividend Yield: 7.04%
- 5Y CAGR: 3.01%
- Sector: Oil & Gas – Refining & Marketing
Bank of Baroda Ltd
The Bank of Baroda Limited operates within the banking and financial services sector in India. Its business is divided into segments including Treasury, Corporate / Wholesale Banking, Retail Banking and Other Banking Operations.
The company’s operations are further categorized into Domestic Operations and Foreign Operations. The bank offers various personal banking services like savings accounts, current accounts and term deposits. It also provides a range of digital banking products such as Internet banking, mobile banking, cards, WhatsApp banking, digital signage systems (DSS), self-service passbook printers and automated teller machines (ATMs).
- Market Cap: ₹ 1,27,991.21 Crore
- Close Price: ₹ 246.45
- 1Y Return: 25.92%
- 1M Return: 2.45%
- 6M Return: -8.52%
- 5Y Average Net Profit Margin: 7.68%
- Dividend Yield: 3.08%
- 5Y CAGR: 19.26%
- Sector: Public Banks
Punjab National Bank
Punjab National Bank (PNB) is a bank headquartered in India. It operates through various segments including Treasury Operations, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations. The bank offers a range of products including personal, corporate, international and capital services.
Personal products encompass deposits, loans, housing projects, NPA settlement options, accounts, insurance, government services, financial inclusion and priority sector services. Corporate offerings include loans, forex services for exporters/importers, cash management and a gold card scheme for exporters.
- Market Cap: ₹ 1,20,802.33 Crore
- Close Price: ₹ 104.38
- 1Y Return: 32.54%
- 1M Return: 8.70%
- 6M Return: -19.43%
- 5Y Average Net Profit Margin: 3.70%
- Dividend Yield: 1.37%
- 5Y CAGR: 10.38%
- Sector: Public Banks
What are Government Stocks?
Government stocks, also known as government bonds or sovereign bonds, are debt securities issued by a government to raise funds. They are considered low-risk investments since they are backed by the full faith and credit of the issuing government.
These stocks pay periodic interest to investors, typically known as coupon payments, and return the principal amount upon maturity. They serve as a crucial tool for governments to finance public spending, infrastructure projects, and other initiatives without increasing taxes.
Investors often view government stocks as a safe haven during economic uncertainties. They provide a stable source of income and help diversify investment portfolios, making them an attractive option for conservative investors seeking lower-risk opportunities.
Features Of Best Government Stocks
The main features of the best government stocks include safety, regular income, liquidity, and favorable tax treatment. These characteristics make them attractive investments, especially for risk-averse individuals and those seeking to secure their financial future while minimizing tax liabilities.
- Safety: Government stocks are backed by the government, making them one of the safest investment options available. The low default risk provides peace of mind to investors, particularly during times of economic instability or market volatility.
- Regular Income: These stocks typically offer periodic interest payments, known as coupons, providing a reliable source of income. This feature is appealing to income-focused investors, such as retirees, who need consistent cash flow to meet living expenses.
- Liquidity: Government stocks are highly liquid, allowing investors to buy and sell them easily in the market. This liquidity ensures that investors can access their funds when needed, without significant delays or price reductions.
- Favorable Tax Treatment: Many governments offer tax incentives on interest earned from government stocks, making them a tax-efficient investment. This can enhance overall returns and encourage investors to allocate more funds to these securities compared to other investment options.
List Of Government Stocks In India Based on 6-Month Return
The table below shows a List of the Best Government Stocks based on 6 Month Return.
| Stock Name | Close Price ₹ | 6M Return % |
| Power Grid Corporation of India Ltd | 339.25 | 6.7 |
| Bharat Electronics Ltd | 307.35 | 1.17 |
| State Bank of India | 839.4 | 0.68 |
| Bank of Baroda Ltd | 246.45 | -8.52 |
| Bharat Petroleum Corporation Ltd | 293.45 | -10.42 |
| Life Insurance Corporation of India | 916.3 | -11.56 |
| Hindustan Aeronautics Ltd | 4,474.65 | -15.13 |
| Coal India Ltd | 417.15 | -16.78 |
| Indian Oil Corporation Ltd | 139 | -17.7 |
| Punjab National Bank | 104.38 | -19.43 |
Top Government Stocks To Buy Based on 5-Year Net Profit Margin
The table below shows the Best Government Stocks based on 5-year Net Profit Margin.
| Stock Name | Close Price ₹ | 5Y Avg Net Profit Margin % |
| Power Grid Corporation of India Ltd | 339.25 | 31.67 |
| Coal India Ltd | 417.15 | 18.38 |
| Hindustan Aeronautics Ltd | 4,474.65 | 18.19 |
| Bharat Electronics Ltd | 307.35 | 15.94 |
| State Bank of India | 839.4 | 8.58 |
| Bank of Baroda Ltd | 246.45 | 7.68 |
| Punjab National Bank | 104.38 | 3.7 |
| Bharat Petroleum Corporation Ltd | 293.45 | 3.52 |
| Indian Oil Corporation Ltd | 139 | 3.26 |
| Life Insurance Corporation of India | 916.3 | 2.14 |
Best Government Stocks To Buy Based on 1M Return
The table below shows the Best Government Stocks Based on 1-Month Return.
| Stock Name | Close Price ₹ | 1M Return % |
| Punjab National Bank | 104.38 | 8.7 |
| Bharat Electronics Ltd | 307.35 | 7.68 |
| Power Grid Corporation of India Ltd | 339.25 | 7.32 |
| State Bank of India | 839.4 | 6.8 |
| Hindustan Aeronautics Ltd | 4,474.65 | 4.38 |
| Bank of Baroda Ltd | 246.45 | 2.45 |
| Life Insurance Corporation of India | 916.3 | 0 |
| Bharat Petroleum Corporation Ltd | 293.45 | -4.21 |
| Indian Oil Corporation Ltd | 139 | -7.66 |
| Coal India Ltd | 417.15 | -9.01 |
High Dividend Yield Government Stocks NSE
The table below shows the Best Government Stocks based on Dividend Yield.
| Stock Name | Close Price ₹ | Dividend Yield % |
| Indian Oil Corporation Ltd | 139 | 8.54 |
| Bharat Petroleum Corporation Ltd | 293.45 | 7.04 |
| Coal India Ltd | 417.15 | 6.2 |
| Power Grid Corporation of India Ltd | 339.25 | 3.32 |
| Bank of Baroda Ltd | 246.45 | 3.08 |
| State Bank of India | 839.4 | 1.63 |
| Punjab National Bank | 104.38 | 1.37 |
| Life Insurance Corporation of India | 916.3 | 1.1 |
| Hindustan Aeronautics Ltd | 4,474.65 | 0.8 |
| Bharat Electronics Ltd | 307.35 | 0.74 |
Historical Performance of Government Stocks
The table below shows the Historical Performance of Best Government Stocks based on Market Cap and 5Y Return.
| Stock Name | Close Price ₹ | 5Y CAGR % |
| Hindustan Aeronautics Ltd | 4,474.65 | 63.11 |
| Bharat Electronics Ltd | 307.35 | 55 |
| Power Grid Corporation of India Ltd | 339.25 | 25.32 |
| State Bank of India | 839.4 | 19.56 |
| Bank of Baroda Ltd | 246.45 | 19.26 |
| Coal India Ltd | 417.15 | 15.72 |
| Punjab National Bank | 104.38 | 10.38 |
| Indian Oil Corporation Ltd | 139 | 9.72 |
| Bharat Petroleum Corporation Ltd | 293.45 | 3.01 |
Factors To Consider When Investing In Best Government Stocks
The main factors to consider when investing in the best government stocks include interest rates, inflation, credit ratings, and investment horizon. Understanding these elements helps investors make informed decisions that align with their financial goals and risk tolerance.
- Interest Rates: Fluctuations in interest rates significantly impact the value of government stocks. When rates rise, existing bonds may decrease in value, so investors should assess current and projected interest rate trends before investing to minimize potential losses.
- Inflation: Inflation erodes the purchasing power of fixed-income returns. Investors should consider the expected inflation rate when choosing government stocks, as higher inflation can reduce the real value of interest payments and principal, affecting long-term investment returns.
- Credit Ratings: Government stocks come with varying credit ratings that indicate the risk of default. Investors should research the issuing government’s creditworthiness and stability to ensure they are investing in securities with a strong likelihood of repayment.
- Investment Horizon: Determining the investment horizon is crucial when selecting government stocks. Long-term investors might prefer bonds with longer maturities for higher returns, while those needing immediate liquidity should consider shorter-term securities to align with their financial objectives.
How To Invest In the Best Government Stocks?
Listed below are the steps for investing in the best Government Stocks:
- Research and find out the top-performing stocks in the market.
- Evaluate and assess your risk appetite and fix your financial goals.
- Shortlist the stocks based on your fundamental and technical analysis.
- Find reliable stockbrokers like Alice Blue to open a demat account.
- Invest in the shortlisted stocks and monitor them regularly.
Impact of Government Policies on Government Stocks
Government policies significantly impact government stocks by influencing interest rates, fiscal spending, and economic stability. Policies that promote economic growth or infrastructure development can enhance investor confidence, driving demand for these securities and potentially increasing their value.
Conversely, restrictive policies, such as high taxation or austerity measures, can lead to reduced investor appetite for government stocks. Additionally, changes in monetary policy, such as interest rate hikes by central banks, may negatively affect bond prices, prompting investors to reassess their portfolios.
How Government Stocks Perform in Economic Downturns?
During economic downturns, government stocks often perform relatively well compared to other asset classes. Investors typically seek safety in these securities, as they are backed by the government, leading to increased demand and potentially stabilizing their prices.
However, prolonged downturns may still affect government stocks, particularly if the issuing government faces budget deficits or rising debt levels. Reduced tax revenues can lead to concerns about the government’s ability to meet its obligations, causing fluctuations in stock performance and investor sentiment.
Advantages Of Investing In Best Government Stocks?
The main advantages of investing in the best government stocks include capital preservation, predictable income, diversification, and tax benefits. These features make government stocks appealing to conservative investors seeking stable returns and reduced risk in their investment portfolios.
- Capital Preservation: Government stocks are generally considered low-risk investments due to their backing by the government. This characteristic helps preserve capital, making them an ideal choice for risk-averse investors who prioritize safeguarding their principal amount during market fluctuations.
- Predictable Income: These stocks typically provide regular interest payments, known as coupons, offering investors a reliable source of income. This predictability helps investors plan their finances better, particularly for those relying on fixed income during retirement or other life stages.
- Diversification: Including government stocks in an investment portfolio can enhance diversification, reducing overall risk. By balancing riskier assets like stocks with stable government securities, investors can achieve more stable returns and protect their portfolios against market volatility.
- Tax Benefits: Many governments offer favorable tax treatment for interest earned on government stocks, which can improve overall returns. This advantage makes government securities a more attractive investment option compared to other income-generating assets that may be subject to higher tax rates.
Risks Of Investing In Best Government Stocks?
The main risks of investing in the best government stocks include interest rate risk, inflation risk, credit risk, and liquidity risk. Understanding these factors is crucial for investors to make informed decisions and mitigate potential downsides associated with these securities.
- Interest Rate Risk: Government stocks are sensitive to changes in interest rates. When rates rise, the market value of existing bonds typically falls, potentially leading to capital losses for investors who need to sell before maturity. This can affect overall returns.
- Inflation Risk: Inflation can erode the purchasing power of the fixed interest payments received from government stocks. If inflation outpaces the returns, investors may find that their real income decreases, affecting their long-term financial goals and standard of living.
- Credit Risk: Although government stocks are generally considered low-risk, there is still a possibility of default, particularly with less stable governments. Investors should assess the creditworthiness of the issuing government to avoid potential losses in the event of fiscal instability.
- Liquidity Risk: While government stocks are usually liquid, specific issues or market conditions can lead to reduced liquidity. In times of economic uncertainty, it may be challenging to sell these securities without incurring significant price reductions, impacting investors’ access to cash.
Government Stocks NSE GDP Contribution
Government stocks, primarily issued by central and state governments, play a vital role in financing public expenditures and infrastructure development, which significantly contributes to GDP. By raising capital through these securities, governments can invest in projects that stimulate economic growth and job creation.
The performance of government stocks on exchanges like the NSE reflects investor confidence and economic stability. A robust government bond market can enhance liquidity and attract foreign investment, further bolstering GDP. Additionally, stable government stocks often indicate a healthy economy, encouraging consumer and business spending.
Who Should Invest in the Best Government Stocks?
Best government stocks are suitable for conservative investors seeking low-risk investment options. These securities appeal to individuals prioritizing capital preservation and consistent income, such as retirees, as they offer predictable returns backed by the government’s financial stability.
Additionally, government stocks are ideal for those looking to diversify their investment portfolios. Investors with a long-term focus, including those saving for retirement or significant future expenses, can benefit from the stability and reliability of government bonds, balancing riskier investments in their portfolios.
List Of Government Companies In Stock Market NSE – FAQs
Government stocks, also known as government bonds or sovereign bonds, are debt securities issued by a government to raise funds. They offer investors periodic interest payments and return the principal at maturity, providing a low-risk investment option backed by government credit.
PSU stocks, or Public Sector Undertaking stocks, refer to shares of companies owned or controlled by the government. These firms operate in various sectors, including energy, finance, and infrastructure, and are typically characterized by stable revenues and government backing.
Top Top Government Stocks # 1: State Bank of India
Top Top Government Stocks # 2: Life Insurance Corporation of India
Top Top Government Stocks # 3: Power Grid Corporation of India Ltd
Top Top Government Stocks # 4: Hindustan Aeronautics Ltd
Top Top Government Stocks # 5: Coal India Ltd
The Top Government Stocks based on market capitalization.
The Best Government Stocks based on 6-month returns include Power Grid Corporation of India Ltd, Bharat Electronics Ltd, State Bank of India, Bank of Baroda Ltd, and Bharat Petroleum Corporation Ltd.
Investing in government stocks is generally considered safe due to their backing by the government, which reduces default risk. However, factors such as interest rate fluctuations and inflation can impact returns, so investors should assess their financial goals and market conditions.
To invest in government stocks, open a brokerage account like Alice Blue or use a government-approved platform. Research available government bonds, select the desired maturity and yield and place an order. Monitor your investments periodically to ensure they align with your financial goals.
Investing in government stocks can be good for conservative investors seeking stability and reliable income. They offer lower risk compared to equities but may provide lower returns. Assessing individual financial goals and market conditions is essential before making investment decisions.
Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.
