Indian PSU Sector Growth: Market Cap Nears ₹70 Lakh Crore After Decade of Expansion

New Delhi, February 19, 2026: India’s public sector undertaking (PSU) sector has undergone a significant transformation over the past decade, emerging as a stronger, more profitable and more relevant component of the country’s economic and financial landscape.

Driven by structural reforms, improved corporate governance, cleaner balance sheets and rising investor confidence, PSUs have delivered substantial gains in market capitalisation, profitability and overall market presence.

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Market Capitalisation Rises Dramatically

One of the clearest measures of growth in the PSU sector is the rise in market capitalisation:

In March 2020, the combined market value of listed PSU stocks was estimated at roughly ₹12 lakh crore.
By June 2025, this figure had surged to approximately ₹69 lakh crore — a rise of around ₹57 lakh crore over five years.
As of early 2026, PSUs account for about 15 % of the total market capitalisation of Indian equities, up significantly from earlier in the decade.

This expansion reflects renewed investor interest in public enterprises across sectors such as banking, energy, power, natural resources and infrastructure.

Profitability Strengthens Across the Board

PSUs have also recorded strong profit performance in recent years:

In FY24, 56 listed PSUs reported a combined net profit exceeding ₹5 lakh crore, highlighting improved earnings power across key sectors.
Major contributors to this earnings growth included large PSU banks, energy and oil companies, and core infrastructure firms.

Stronger profitability has helped reinforce the investment case for PSU stocks and improved market sentiment.

Sector Leadership and Performance Highlights

Several PSU companies have played a leading role in the sector’s turnaround:

State Bank of India (SBI) continues to lead in profit and market share among PSU banks.
Energy giants such as Oil & Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC) have posted strong financial results, supporting broader sector gains.
Coal India and other resource‑centric PSUs have benefited from stable demand and operational improvements.

These individual performances have collectively lifted the valuation and earnings profile of the entire PSU segment.

Increasing Market Share and Investor Interest

The growing valuation of PSU stocks has translated into increased participation in India’s equity markets:

PSUs today represent a significantly larger portion of total market value compared with a few years ago, strengthening their role in major indices.
Institutional investors and mutual funds have increased exposure to PSU equities, especially in banking and infrastructure segments.

Analysts note that improved balance sheets, clearer financials and stronger earnings momentum have helped PSUs regain credibility among market participants.

Structural Reforms and Long‑Term Outlook

Over the last decade, government policy and corporate reforms have helped revitalize public enterprises:

Operational autonomy and performance‑linked frameworks have encouraged stronger corporate discipline.
Targeted capital infusion and strategic divestment in select entities have improved financial health.
Emphasis on modernisation and technology adoption has enhanced operational efficiency.

Looking ahead, PSUs are expected to continue benefiting from rising infrastructure spending, growth in energy demand, financial reforms and strategic national priorities such as renewable energy and defence manufacturing.

What It Means for the Economy

The decade‑long growth of the PSU sector underscores its evolving role as:

A significant contributor to India’s corporate profits and tax revenues
A meaningful participant in equity markets
A partner in national development initiatives

While challenges remain, the sustained improvement in market capitalisation and profitability highlights the renewed relevance of PSUs in India’s economic growth story.

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