What are PSU companies?
PSU companies are nothing but public sector undertaking companies that are under the control of the union government.
Ex – Coal India, ONGC, and others
The benefits of investing in government-controlled companies include minimal risk and high rewards. A government public company is a company in which the government owns more than 50% of its shares. In a government-owned public company, the government has entire control over the business, profits, and risks. These companies generally generate the most revenue and even profit in their respective sectors. The reason behind the monopoly is the government that sets the rules and regulations.
Why PSU companies do not give returns
These government sector companies are under the control of the union government and whatever decisions are taken would benefit the people of India but not the company or its shareholders. Their functionality is different and cannot be relatable to private companies.
Lack of efficiency and unexpandable
In PSU companies there will be predefined targets like private companies to expand their presence globally. Even if they miss the target of their revenue all the employees will receive the same salary without any deductions.
For benefit of the people
A government company must work for the people of the country.
More incentives to the Employees
Unlike private-based companies, government companies give huge benefits to their employees be it with health, or other allowances. In fact, they receive regular income every month even if they fail to reach the target.
Risky to operate
Commonly handling public sector companies is too risky to bear. The highest profit makers like coal India, NTPC, and Indian oil corporations are too sensitive to global economic changes or reactions. War in Ukraine has raised a lot of uncertainties in the oil market due to supply chain issues but India mindfully played a game and bought cheap oil from Russia. But what is the situation tuned out to be in favor of Russia?
Not user friendly
Franky speaking PSU companies are the worst service providers when it comes to customer satisfaction. If you ever went to a PSU bank like SBI, then you will definitely notice the service from the employees. Even their online services or mobile applications is not too responsive and productive.
Underperformed PSU companies list
- Coal India
Coal India is an Indian-based coal mining company that extracts coal to produce electricity. Coal India is one of the largest coal extracted in India controlled by the Ministry of Coal, Government of India.
NTPC defines as National Thermal Power Corporation Limited works on the generation of electricity and sale of electricity.
3. Power Grid corporation
Power Grid Corporation of India is a power transmission company engaged in different power sector services.
4. Indian Oil
Indian Oil is an Indian petroleum products-related company that produces petroleum products and petrochemicals.
ONGC defines as Oil and Natural Gas Corporation Limited which is engaged in the extraction of crude oil and natural gas.
PSU companies are customer-benefit-oriented service-based companies that work under different ministries like coal, industries, and Technology. Historically PSU stocks are the highest regular dividend givers to its shareholders. If you are one among those looking for a decent share uprise and the best dividends with low volatility then PSU stocks could be a perfect match for your portfolio.
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