Public Sector Undertakings Market Crash | PSU Stock Sell-Off | PSU Market Cap Decline
Public Sector Undertakings (PSUs), once the darling of investors, are facing a sharp sell-off, pushing their combined market capitalisation to its lowest level in 15 months. The combined market capitalisation of 103 listed PSU companies stood at ₹57.43 lakh crore in February 2025, reflecting a steep decline from the ₹81.38 lakh crore peak in July 2024 — a loss of ₹24 lakh crore in just seven months.
Why Are PSU Stocks Falling?
The downward trend began in December 2024, when the combined valuation was at ₹66.34 lakh crore, followed by ₹64.88 lakh crore in January 2025. The sell-off intensified in February, further dragging down the market value of PSU firms.
Factors Behind the PSU Sell-Off
Market analysts attribute the massive sell-off to several factors, including profit booking by investors, global market uncertainty, and valuation concerns. After a significant rally in PSU stocks throughout 2023 and early 2024, many investors are now booking profits, leading to a sharp price correction.
Moreover, geopolitical tensions, rising global interest rates, and concerns over slower economic growth have further dented investor confidence in PSU stocks.
Key PSU Stocks Affected
Major PSU companies such as State Bank of India (SBI), Coal India, ONGC, and BHEL have seen significant price corrections. SBI, India’s largest public sector bank, witnessed a 12% decline in February alone, while Coal India and ONGC faced losses of 10% and 8%, respectively.
Expert Opinion on PSU Stock Sell-Off
“The recent sell-off in PSU stocks is primarily driven by profit booking. The rally in PSU shares over the past two years had pushed valuations to record highs. However, long-term investors should not panic as the fundamentals of most PSU companies remain strong,” said Amit Khurana, Head of Research at Dolat Capital.
Outlook for PSU Stocks in 2025
Despite the current downturn, market experts believe that PSU stocks still hold potential for long-term growth, especially in sectors like banking, energy, and infrastructure. Government reforms and rising capital expenditure are expected to drive the next wave of growth for select PSU firms.
Investors are advised to focus on fundamentally strong PSU companies with consistent earnings growth and robust balance sheets.
Stay tuned to Money Flow Insight for more updates on PSU stock market trends, business news.
