Indian PSUs Continue Soaring For Third Consecutive Year – Marking Up to 250% Growth in 2023!

Of the 55 companies that make up the Indian PSU (BSE) index, 53 have returned more than ten percent so far this year.

In 2023, the stock market of state-owned businesses in India have gained for three years consecutively. This year, the BSE (Indian PSU) PSU index—which measures the performance of public sector enterprises—has risen by an astounding 46.43%, outpacing the return of the benchmark BSE Sensex index, which came in at 14.93%.

Of the 55 companies that make up the BSE PSU index, 53 have returned more than ten percent so far this year, with the majority of these being power-related businesses.

Indian PSU

Leading the pack is Rural Electrification Corporation (REC), which reported an incredible 250% return in 2023, the largest annual increase since 2009. The stock closed higher in ten of the previous eleven months, reaching a new all-time high of Rs 412 per share.

July saw the biggest monthly gain of 23.26%, followed closely by September’s gain of 20.43%. Power sector finance companies and supply chain entities gain from the spike in power stocks, which are a result of a strong increase in power demand amid heightened economic activities.

September had a record-breaking high of 243.27 GW in electricity demand, driven by industrial activity associated with the holiday rush. Shares of Power Finance Corporation surged by 245%, from ₹113.95 at the beginning of the year to Rs 389.55 at present.

Scenario After Union Budget

Following the government’s announcement in the Union Budget 2023–2024 of a record capital spending of ₹2.40 lakh crore for the Indian Railways, railway PSUs also saw high returns, driven by significant order wins.

Ircon International’s shares increased 173% to Rs 163.35 apiece, while Rail Vikas Nigam’s shares increased 161.17% to Rs 199.25 apiece, a new all-time high. With an impressive return of 153%, Indian Railway Finance Corporation (IRFC) was again another top performer in the BSE PSU index.

Increased funding allotments, significant order wins, and the government’s focus on strengthening domestic procurement while lowering reliance on defense imports all contributed to the significant improvements in the defense sector.

The shares of Mazagon Dock Shipbuilders saw a 165.28% return in CY23, rising from Rs 798 to Rs 2,117 per share. Cochin Shipyard continued its upward trend with a strong 140% rise this year.

SJVN had an amazing 162% increase in the renewable energy space in CY23, mostly because of strong order wins. A number of other equities in the BSE PSU index have also produced impressive returns this year, ranging from 103% to 127%. These stocks include ITI, BHEL, MRPL, NLC India, NBCC (India), and Engineers India.