Top Government Stocks Under 100

What are Government Stocks Under 100 in India?

Government stocks under ₹100 are PSU shares trading below ₹100 per share on Indian exchanges. These include banks, power generators, mining companies and telecom providers where the government has majority ownership. They allow small investors to buy into state-linked companies at low capital outlay and get government policy support and potential dividends.

Overview of Top 5 Government stocks under 100

1. National Fertilizers Ltd: National Fertilizers Ltd manufactures and markets nitrogenous fertilizers (urea and ammonia) with manufacturing units and a distribution network across India to supply key nutrients to the agriculture sector. The government ownership ensures quality control.
2. IDBI Bank Ltd: IDBI Bank Ltd provides corporate and retail banking services (loans, deposits, treasury) with branches and digital platforms across India. It focuses on infrastructure financing and SME lending with government stake and market-driven banking solutions.
3. NHPC Ltd: NHPC Ltd develops and operates hydroelectric power projects, manages dams and generating stations across India. It is involved in project planning, construction and power evacuation. Supplies clean energy to utilities under long-term power purchase agreements. The government ownership reflects renewable energy objectives.
4. NMDC Ltd: NMDC Ltd mines and explores iron ore, and operates open-pit and underground mines in India. It processes and sells high-grade ore to steel producers. Beneficiation and pelletisation operations under government ownership to support domestic steel industry demand.
5. MMTC Ltd: MMTC Ltd trades in international minerals, metals and fertilisers, exports and imports commodities like coal, copper and precious metals. Facilitates global sourcing, quality control and logistics under government aegis, connects Indian markets to the global supply chain.

How to invest in Government stocks under 100 in India?

Here is how you can invest in the best government stock under 100:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Conduct thorough research into the best govt stocks under 100 in India using Tickertape Stocks Screener. The screener offers over 200 built-in filters, allowing investors to select parameters and generate a list of government shares under 100.
3. Place a ‘Buy’ Order on the top government companies’ stocks that align with your investment thesis.

Advantages of Investing in Government stocks under 100 in India

• Affordable Entry: It enables the purchase of a greater number of shares with limited capital. This boosts diversification by spreading risk across multiple PSUs at a modest outlay. It fosters a balanced investment portfolio.
• Government Backing: Provides sovereign support and potential bailouts during downturns, as state ownership often delivers stronger financial and credit backing. This may reduce default risk for smaller domestic PSU investors.
• Dividend Income: Many PSUs distribute regular dividends, offering steady cash flows. Predictable income can enhance total returns, especially when share price growth remains moderate.
• Market Liquidity: High trading volumes for popular PSU stocks facilitate ease of buying and selling. This may result in lower transaction costs and slippage that significantly improve overall operational trade execution efficiency.

Risks of Investing in Government stocks under 100 in India

• Policy Dependence: Performance hinges on government decisions and reforms. Policy shifts may alter profitability or operational freedom. This can impact share prices and introduce unpredictability to shareholder returns.
• Limited Growth Potential: Bureaucratic structures in PSUs are complex and can hamper project completion and expansion, affecting their agility, innovation, and competitive responsiveness compared to private peers.
• Valuation Traps: A low share price can mislead investors into thinking a stock is undervalued. When fundamental metrics like earnings and cash flows don’t support valuations, it creates hidden downside risk.
• Operational Inefficiencies: PSUs may experience higher costs and delays due to a lack of profit-driven incentives, affecting profit margins and financial performance.

Factors to Consider Before Investing in Government Stocks under 100 in India

• Financial Health: Assessment of balance sheets, debt levels, and profitability may reveal sustainability and potential distress risk, indicating whether a PSU can maintain operations and meet obligations.
• Management Quality: Reviewing the leadership track record and governance practices can help identify strategic execution capabilities and accountability standards that may impact corporate performance and stakeholder confidence.
• Industry Outlook: Examination of sector growth prospects and regulatory environment determines potential headwinds or tailwinds that may influence a PSU’s ability to capitalise on market opportunities.
• Dividend History: Analysis of past payout ratios and consistency may highlight the reliability of cash flows and managerial commitment to sharing profits, reflecting operational stability and shareholder focus.