Public Sector Undertakings (PSUs) have always been a haven for people who want to earn better returns than traditional investments such as FDs, and saving schemes, but are also cautious about taking higher risks. These companies are also favourites of most investors as they offer decent gains at lower risk. However, there are hundreds of such PSUs, and tracking them individually is a task. Thus, the S&P BSE PSU Index was launched to track the PSU companies. 

This article will revolve around the S&P BSE PSU index, its constituents, selection criteria, investment process, returns, risks and more. 

S&P BSE PSU Index – Overview & Constituents 

The S&P BSE PSU index reflects the performance of the top 63 PSUs in India which are listed on the BSE. The index was launched on 4 June 2001. This is a well-diversified index as it includes PSUs from across the sectors. 

The S&P BSE PSU index stocks list includes – (As of 4 February 2025)

BANK OF BARODA	Garden Reach Shipbuilders & En	ITI LTD.	OIL INDIA LTD.
BANK OF INDIA	General Insurance Corporation	JAMMU & KASHMIR BANK LTD.	POWER FINANCE CORPORATION LTD.
BANK OF MAHARASHTRA	Gujarat Gas Limited	KIOCL Limited	POWER GRID CORPORATION OF INDI
BEML LTD.	GUJARAT MINERAL DEVELOPMENT CO	LIFE INSURANCE CORPORATION OF	PUNJAB & SIND BANK
Bharat Dynamics Limited	Hindustan Aeronautics Limited	MANGALORE REFINERY & PETROCHEM	PUNJAB NATIONAL BANK
BHARAT ELECTRONICS LTD.	HINDUSTAN COPPER LTD.	Mazagon Dock Shipbuilders Limi	Rail Vikas Nigam Limited
BHARAT HEAVY ELECTRICALS LTD.	HINDUSTAN PETROLEUM CORPORATION	Mishra Dhatu Nigam Limited	RASHTRIYA CHEMICALS & FERTILIZE
BHARAT PETROLEUM CORPORATION L	Housing &Urban Development Cor	MMTC LTD.	REC LIMITED
CANARA BANK	IFCI LTD.	NATIONAL ALUMINIUM CO. LTD.	RITES Limited
CENTRAL BANK OF INDIA	INDIAN BANK	NBCC (India) Limited	SJVN LTD
CHENNAI PETROLEUM CORPORATION	INDIAN OIL CORPORATION LTD.	NHPC LTD.	STATE BANK OF INDIA
COAL INDIA LTD.	INDIAN OVERSEAS BANK	NLC India Limited	STEEL AUTHORITY OF INDIA LTD.
Cochin Shipyard Limited	Indian Railway Catering and To	NMDC LTD.	The New India Assurance Compan
CONTAINER CORPORATION OF INDIA	Indian Railway Finance Corpora	NMDC Steel Limited	UCO BANK
ENGINEERS INDIA LTD.	Indian Renewable Energy Develo	NTPC LTD.	UNION BANK OF INDIA
GAIL (INDIA) LTD.	IRCON International Ltd	OIL AND NATURAL GAS CORPORATIONS

The top ten stocks by weightage – 

Stocks	Weightage (%)
State Bank of India	16.59
NTPC Ltd.	8.4
Power Grid Corporation of India	7.35
Bharat Electronics Ltd.	5.58
Oil And Natural Gas Corporation	5.52
Coal India Ltd.	4.85
Hindustan Aeronautics Ltd.	3.75
Power Finance Corporation Ltd.	3.18
REC Ltd.	2.85
Bharat Petroleum Corporation Ltd.	2.77

Sectoral Weightage

Sectors	Weightage (%)
Financial Services	36.94
Energy	21.96
Utilities	17.77
Industrials	16.64
Commodities	3.98
Consumer Discretionary	1.34
Services	1.21
Telecommunication	0.17

Selection Criteria

The stock selection criteria for the equity index S&P BSE PSU index include – 

• The security must be listed on BSE and a part of BSE 500 universe
• The security must be a public sector undertaking according to the BSE Sector Classification
• For the same it needs to have 51% or more of government ownership – it can be state government undertaking, central government, or governments jointly owning the enterprise
• The security must have been listed for at least a month before the review

Factors Affecting the S&P BSE PSU Index

The factors which affect the S&P BSE PSU index are – 

• Demand and supply: The most important factor that affects the BSE PSU index is the demand-supply ratio. If the demand for the goods that the PSUs manufacture or the services they offer is high, the constituting companies will flare, which can take the index upward. When demand pressure declines, supply is in abundance, and prices drop, often hurting the financials of the companies and, in turn, dragging the index down.  
• Government Intervention: As the PSUs are government undertakings, policies made by the governments affect these PSUs significantly. 
• Economic Scenario: The economic scenario of the country determines the business of these PSUs. If the economic condition is poor, then it usually lowers the performance of the PSUs, and vice versa. 
• Capital Expenditure: The capital expenditure by the government also plays a pivotal role in determining the movement of this PSU index. When capex increases, usually the PSUs perform better as more capital flows which leads to development, and prosperity and vice versa.
• Geopolitical Scenario: Finally, geopolitical issues such as the trade war between countries, also influence the business of these PSUs and thus affect the index valuation.  

S&P BSE PSU Index Calculation Method

For the S&P BSE PSU index, the stocks are selected based on float-adjusted market cap weighted. 

Index Value = Index Market Value/ Divisor

Here, 

Index Market Value = Price of the security * number of securities * IWF (Float Factor) 

Divisor = Market Value / Index Value 

Performance and Returns

Here are the returns for different periods – 

Price Returns & Total Returns

Period	Price Return (%)	Total Return (%)
1 Month	-2.53	-2.34
3 Month	-7.55	-6.90
YTD	-2.53	-2.34
1 Year	6.33	9.22
3 Years	26.81	31.43
5 Years	22.87	28.01
10 Years	8.41	12.31

Enjoy investing in the top stocks of the BSE 500 universe with the S&P BSE PSU index on Shoonya App!

Risk and Volatility

S&P BSE PSU Index encompasses multiple sectors which increases the diversification effect and reduces the risks to a great extent. However, there are certain risks which need to be considered and there is an analysis of its annualised risk and Annualised Risk-Adjusted Returns. 

Period	Annualised Risk (%)	Annualised Risk-Adjusted Returns (%)
Total Returns
1 Year	–	–
3 Years	20.65	1.5
5 Years	21.49	1.3
10 Years	24.05	0.51
Price Returns
1 Year	–	–
3 Years	20.67	1.28
5 Years	21.50	1.06
10 Years	24.33	0.35

How to Invest in the S&P BSE PSU INDEX?

You can invest in the S&P BSE PSU Index using ETFs, or index funds, or you can trade them on the trading platform. You can also trade S&P BSE PSU Index futures, and options in the F&O section of Shoonya’s app. To do so, you have to add the index to your watchlist following these steps – 

• Open the Shoonya app.
• Head to the “Watchlist” tab located at the bottom of your screen.
• In the search bar, type “NIFTY IN” or “SENSEX IN” and add it to the watch list, and then you will be able to see the indices. Choose the “BSE PSU Index”.
• Once you find your desired index, click on the add option given on the right side.
• Now you can see the index on the watchlist. 

Conclusion

So, if you are interested in the public sector undertakings, or want to track them to understand the overall market dynamics, this BSE PSU Index can be your way to track the them without individually going through each PSU’s performance. 

S&P BSE PSU Index | FAQs

Source: BSEIndia

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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.