As global markets face heightened volatility, investors are shifting capital toward India's state-owned enterprises, drawn by perceived stability and resilience. The move underscores growing risk aversion amid escalating trade tensions.
- ONGC, IOC, and PGCIL saw combined market cap rise 12% in one month
- ONGC posted ₹29,700 crore net profit in FY2025 (+14% YoY)
- Rupee weakened to 84.6 per dollar in late 2025
- Foreign equity outflows from private firms totaled ₹1.9 trillion in Q4 2025
- S&P BSE PSU Index gained 18% in Q4 2025
Investors are increasingly turning to India’s publicly listed state-owned firms as a safe haven amid deepening global market selloffs. This trend has driven significant inflows into government-backed entities such as Oil & Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), and Power Grid Corporation of India (PGCIL), with the combined market capitalization of these three firms rising by over 12% in the past month. The shift is particularly notable given recent geopolitical pressures, including proposed U.S. tariffs targeting Indian exports, which have raised concerns about export competitiveness and macroeconomic stability. The flight to safety reflects broader investor anxiety about external risks. In December 2025, India’s foreign exchange reserves declined by $7.3 billion, while the rupee weakened to a new low of 84.6 per dollar—the worst level since early 2023. Despite this, state-owned companies have maintained consistent dividend payouts and strong balance sheets, attracting institutional buyers seeking predictable returns. ONGC reported a net profit of ₹29,700 crore ($3.4 billion) in FY2025, marking a 14% year-on-year increase, while PGCIL achieved a record ₹14,500 crore in earnings before interest, taxes, depreciation, and amortization (EBITDA). Market analysts note that the preference for public sector stocks is also fueled by their dominance in critical infrastructure sectors. With over 60% of India’s power transmission network under PGCIL control and nearly half of domestic crude oil refining capacity managed by IOC and ONGC, these firms are seen as essential to national economic continuity. As equity outflows from private-sector equities reached ₹1.9 trillion in Q4 2025, state-owned stock indices like the S&P BSE PSU Index gained 18% during the same period. The realignment in investor sentiment may influence future fiscal policy, as pressure mounts on the government to bolster public sector investment while managing debt sustainability. Meanwhile, private firms across manufacturing and tech sectors continue to face margin pressures, further amplifying the appeal of state-backed stability.