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In the past decade, private firms have strengthened their position in India’s equity markets. Their combined market capitalization surged 6.4 times, reaching ₹384 trillion. In comparison, Public Sector Undertakings (PSUs) saw their market capitalization grow 5 times to ₹72 trillion, although this figure has declined from an October 2024 peak of around ₹80 trillion.
Despite private companies leading the charge, PSUs have shown a notable revival in recent years. From FY22 to FY24, the contribution of PSUs to total market capitalization rose from 11% in FY22 to 16% in 2024. However, this is slightly down from the October 2024 high of 18%.
PSUs in the Listed Space
The PSU sector’s relatively lower market capitalization compared to private peers is partly due to its cyclical business nature. Currently, only 110 PSUs are traded in the listed space. The cyclical trends in their operations often result in lower valuations compared to private companies, which are typically more diversified and growth-oriented.
This data underlines the continuing dominance of private firms in driving the Indian equity market while also acknowledging the recent resurgence of PSUs.
