There are multiple types of Penny stocks in the market and generally people think penny stocks are related to small and lesser known companies in the market that trade at a very low prices, often under Rs.10 or Rs.20 per share in India. But there’s another category that sparks a lot of curiosity among new investors i.e. government penny stocks.
So, what exactly are these government penny stocks? Many investors search for a government penny stock list looking for the next big thing. This guide will explain what govt penny stocks are, look at a govt penny stock list, and help you understand if they are right for you.
What Are Government Penny Stocks?
These are stocks of public sector undertakings (PSUs) or government-backed companies that are available at very low prices in the stock market. Because they are tied to the government, they are often seen as slightly more reliable than privately-owned penny stocks, though they can still be highly volatile and risky.
Government penny stocks usually come from sectors like banking, energy, power, infrastructure, and metals, where the government holds a significant stake. Investors are attracted to them because they carry the potential for multibagger returns if the company improves performance, sector demand rises, or government reforms benefit the industry.
10 Government Penny Stocks for 2025
| Company Name | Current Market Price (₹) | Market Cap (₹ Cr.) |
|---|---|---|
| NHPC Ltd. | 83.6 | 84,057 |
| Indian Overseas Bank | 38.5 | 73,541 |
| NMDC Ltd. | 75.0 | 65,930 |
| Bank of Maharashtra | 53.99 | 41,542 |
| UCO Bank | 29.4 | 36,916 |
| SJVN Ltd. | 91.0 | 35,828 |
| Central Bank of India | 36.2 | 32,766 |
| Punjab & Sind Bank | 28.8 | 20,379 |
| IFCI Ltd. | 53.3 | 14,371 |
| MMTC Ltd. | 65.5 | 9827 |
Read Also: Best High Volume Penny Stocks
Government Penny Stocks in India for 2025
1. NHPC Ltd.
National Hydroelectric Power Corporation Ltd. is one of the top hydropower companies of India, which develops and runs electric power plants that generate electricity by water. The company was established in 1975 and is now a Navratan company which plays a key role in India’s clean energy mission. The company develops and operates hydroelectric power plants and sells electricity to multiple states across the country.
2. Indian Overseas Bank
IOB is one of the oldest public sector banks which was incorporated in the year 1937. The headquarter of this bank is in Chennai, Tamil Nadu, IOB became a nationalised bank in the year 1969 and it offers a wide array of banking services which includes retail, corporate, and international banking. It caters to millions of Indian customers and also has a presence in several other countries of the world.
3. NMDC Ltd.
National Mineral Development Corporation Ltd. is the largest producer of iron ore in India. It plays a key role in providing raw material for steel production. It was started in 1958 and plays a very crucial role in the country’s steel production sector. NMDC is a Navaratna company that not only produces iron ore but also operates the only mechanized diamond mine in India, that is located in Panna, Madhya Pradesh.
4. Bank of Maharashtra
BoM was founded in 1935 and got nationalized in 1969, this is a public sector bank that has its roots from Maharashtra. Bank of Maharashtra has the largest number of branches as compared to any other nationalised bank in the state of Maharashtra. The bank provides all the banking services to its users from personal loans and savings accounts to corporate finance and agricultural loans.
5. UCO Bank
UCO Bank, originally established as the United Commercial Bank in 1943, became a nationalised bank in 1969. It is a commercial bank with majority of its shareholding by the Indian Government, it offers all the banking services to individuals and businesses. The bank plays an important role in supporting small and medium enterprises along with the agricultural sector. UCO also has some international branches in Singapore and Hong Kong.
6. SJVN Ltd.
Satluj Jal Vidyut Nigam Limited is a joint venture between the state Government of Himachal Pradesh and the Government of India, which focuses on generating hydroelectric power. Starting with a single project, SJVN has grown to operate multiple power plants in India and is also developing projects in Nepal and Bhutan. It is now diversifying into wind and solar energy, positioning itself as an important player in India’s renewable energy transition.
7. Central Bank of India
This is one of the oldest and largest public sector banks in India, the bank has been a cornerstone of the country’s financial system since its establishment. It was among the 14 major banks nationalised in 1969 and with majority of its stakes owned by the Government of India. It provides all the banking services ranging from deposits, loans and even modern digital banking solutions to nationwide customers. With its historic legacy and PSU backing, the bank continues to play a key role in financial inclusion and India’s banking growth story.
8. Punjab & Sind Bank
The bank was founded in 1908 with a motive to help the weaker sections of the society, this bank was later nationalised by the government in 1980. This major public sector bank has a strong presence in North India and offers multiple services like retail banking, corporate banking and financing for agricultural sectors and small businesses.
9. IFCI Ltd.
Industrial Finance Corporation of India (IFCI) is a government-owned financial institution that provides loan term loans and industrial project financing across the nation. IFCI has played a major role in India’s industrial development and infrastructure growth over the years.
10. MMTC Ltd.
Metals and Minerals Trading Corporation (MMTC) is one of India’s largest international metal trading companies. The company was established in 1963 and is one of the major foreign exchange earning companies of the nation. The company trades in a wide range of commodities like minerals, precious metals (gold and silver), agro products and fertilizers across the world.
| Company Name | P/E Ratio | ROE (%) | ROCE (%) | EPS |
|---|---|---|---|---|
| NHPC Ltd. | 27.53 | 7.58 | 7.42 | 3.04 |
| Indian Overseas Bank | 18.72 | 11.00 | 5.95 | 2.00 |
| NMDC Ltd. | 10.00 | 23.60 | 29.60 | 7.44 |
| Bank of Maharashtra | 7.38 | 22.80 | 5.72 | 7.63 |
| UCO Bank | 15.00 | 8.38 | 5.76 | 2.04 |
| SJVN Ltd. | 51.30 | 5.81 | 4.91 | 1.76 |
| Central Bank of India | 7.90 | 11.40 | 5.48 | 4.81 |
| Punjab & Sind Bank | 18.70 | 7.03 | 5.98 | 1.59 |
| IFCI Ltd. | 44.5 | 2.60 | 8.08 | 1.19 |
| MMTC Ltd. | 137 | 5.87 | 7.70 | 0.65 |
Read Also: Most Famous Penny Stocks in India
Key Factors to Consider for Government Penny Stocks
- Government Backing: Compared with the private organization, government companies are less likely to default, fail or go bankrupt, as the government ownership acts as a safety net for your investments.
- India’s Growth: Putting money into these penny stocks gets your money invested in key sectors like power, banking, and defence that are useful for the country’s growth.
- Growth Potential: Many of these companies have good tenders and deals, also India is a developing economy so these companies are likely to get more projects which can make the stock price grow a lot.
- Easy to Start: As an investor you can just start by Rs.1000 for purchasing these penny stocks.
- Dividends: Some PSUs share profits with investors as dividends, offering a steady source of additional income.
Factors to Consider before Investing in Government Penny Stocks
- Government Plans: A new policy or a big announcement in the Union Budget can give these stocks a big push.
- Privatisation News: If the government talks about selling its share in a company, the stock price often jumps. People expect private owners to run the company better.
- Company Performance: Always review the company’s revenues, profits, and debt levels to ensure financial stability.
- Economy: When the Indian economy is doing well, these sectors also perform well as there is a direct relation between growth and price.
Read Also: Multibagger Penny Stocks
Risks Involved in Government Penny Stocks
- High Fluctuations: The stock price can go up 20% one day and fall just as much the next. You need to be ready for these ups and downs.
- Liquidity Problem: Just because you want to sell doesn’t mean you’ll find a buyer right away. You might have to lower your price or wait.
- News or government effects: A new government or a change in policy can hurt these companies. Their success is often tied to politics.
How Can You Invest in Government Penny Stocks?
Once you’ve selected the company and done with the research part of the associated penny stock, you’ll need a platform to buy shares. When you’re looking at a govt penny stock list, you want something that is simple, quick, and charges low brokerage or transaction cost.
Pocketful is a trading app made for Indian investors like you, that is easy to use and has zero brokerage fees on delivery trades. This makes it a great option if you’re just starting out and want to keep costs down.
Conclusion
Government penny stocks in India are a mix that gives the buyers a high-growth potential of penny stocks with the safety of government ownership.
But you should be clear that they are not a get-rich-quick scheme. They are risky and require you to do a detailed analysis for the stock. Before you invest your money, you should do your homework, analyse the risk factors and get your hands on latest facts and news.
Frequently Asked Questions (FAQs)
Are government penny stocks safer than other penny stocks?
Due to Government ownership these companies are safer for the investors as these companies are less likely to get bankrupt or do fraud with the investors. But they are still very risky due to high market volatility.
What does a high Debt-to-Equity ratio mean for a bank?
For banks, this number is usually high because they take deposits (in the form of debt) to give out loans to its customers. But if the debt-to-equity ratio is much higher than others, it could be a sign of higher risk.
Can I get rich quickly by investing in these stocks?
While some of the penny stocks might give huge returns, most of them don’t and you can even lose your money very quickly in them.
From how much money can I start investing in Government Penny Stocks?
You can just start by investing Rs.1000 and get your hands on a significant number of penny stocks as usually their prices range from Rs.10 to Rs.100.
Where can I find good information on these companies?
Always check the company’s own website for official news and you can also find their financial details on the stock exchange websites (NSE and BSE).
