Bull Run:Top 5 PSU stocks in FII bucket, election 2024 & factors

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

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.

 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.

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.

Top 5 PSU stocks in FII bucket

1. Power Grid Corporation of India (29.82%)  Company Overview | POWERGRID

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. kuckad news.com

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 LIMITED (recindia.nic.in)

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. kuckad news.com

3. NTPC Ltd. (17.86%) Home | NTPC Limited

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.kuckad news.com

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%) BEL | Bharat Electronics Limited (bel-india.in)

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 (pfcindia.com)

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.

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

Data from Trendlyne kuckad news.com

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.