The BSE PSU Index is a thematic stock market index designed to track the performance of select public sector undertakings (PSUs) listed on the BSE. It provides a benchmark for monitoring the performance of government-owned or government-controlled listed businesses across sectors such as financial services, energy, utilities, and industrials. The index is commonly used by investors, analysts, and market participants to evaluate the performance of the PSU segment of the Indian equity market.
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What is BSE PSU Index?
The BSE PSU Index is a sectoral index designed to measure the performance of public sector undertakings as classified under the index methodology prescribed by BSE. The index was launched on June 4, 2001, with a base value of 1,000. As on May 29, 2026, the index has 60 constituents, according to the official BSE PSU Factsheet published by BSE Index Services Ltd. The number of constituents and the companies in the index may change over time as a result of periodic reviews and rebalancing exercises.
How does the BSE PSU Index work?
The BSE PSU Index follows a float-adjusted market capitalisation-weighted methodology. This means each stock’s weight in the index is based on the market value of shares available for public trading, instead of the company’s total market capitalisation. Companies with a larger free-float market capitalisation receive a higher weight within the index.
The eligible universe is derived from the BSE 500 Index. The index is reviewed semi-annually, typically in June and December, to ensure that constituents continue to meet the prescribed eligibility criteria.
Eligibility criteria for BSE PSU Index constituents
To be included in the BSE PSU Index, companies must be part of the BSE 500 Index and classified as public sector undertakings by BSE. Only companies that satisfy the eligibility requirements and continue to meet the relevant criteria are included in the index.
Sectors and top constituents of the BSE PSU Index
According to the BSE factsheet dated May 29, 2026, the index had its highest sector exposure to Financial Services (37.91%), followed by Energy (20.59%). You can see the detailed sector-wise breakdown below.
| Sector | Weightage |
| Financial Services | 37.91% |
| Energy | 20.59% |
| Industrials | 17.24% |
| Utilities | 16.82% |
| Commodities | 5.87% |
| Services | 0.73% |
| Consumer Discretionary | 0.71% |
| Telecommunication | 0.13% |
The index’s top 10 constituents by weight are as follows:
| Company | Weightage |
| State Bank of India | 18.38% |
| NTPC Ltd. | 8.44% |
| Bharat Electronics Ltd. | 6.76% |
| Power Grid Corporation of India Ltd. | 6.06% |
| Coal India Ltd. | 4.79% |
| Oil and Natural Gas Corporation Ltd. | 4.76% |
| Hindustan Aeronautics Ltd. | 3.70% |
| Power Finance Corporation Ltd. | 2.86% |
| Bharat Petroleum Corporation Ltd. | 2.67% |
| Bharat Heavy Electricals Ltd. | 2.46% |
Sector allocations and constituent weights may change over time because of market movements, rebalancing, and index reviews.
Source: BSE PSU Factsheet; BSE Index Services Ltd | Data as on May 29, 2026.
Please note that the reference to any industry/sector/stock is provided for illustrative purposes only. This should not be construed as a research report or a recommendation to buy or sell any security or sector.
Features of BSE PSU Index
Some of the key features of the BSE PSU Index include:
- Exposure to a basket of eligible public sector undertakings
- Float-adjusted market capitalisation-based weighting methodology
- Selection from the BSE 500 universe
- Semi-annual review and rebalancing process
- Representation across several sectors sectors
How to invest in the BSE PSU Index
Investors cannot buy the BSE PSU Index directly, but they can gain exposure to it through funds or securities linked to the index or its constituents. Here are some routes:
Through passive funds: Investors can consider index funds or ETFs that aim to track the BSE PSU Index, if such options are available.
By buying constituent stocks: Investors can invest directly in the companies that are part of the index. However, this requires regular monitoring and portfolio rebalancing.
Before investing, investors should look at factors such as expense ratio, tracking error (difference between the passive fund and the index it tracks), liquidity, sector concentration and suitability with their risk appetite and investment horizon.
Benefits of investing in BSE PSU Index
The BSE PSU Index provides exposure to a diversified group of listed public sector undertakings through a single benchmark.
Some potential benefits include:
- Sector exposure: The index provides exposure to sectors where public sector undertakings have a significant presence, including banking, power, energy, utilities, and industrial businesses.
- Diversification within the PSU segment: Rather than tracking a single PSU stock, the index represents multiple companies across sectors.
- Rules-based methodology: The index follows a predefined methodology with publicly disclosed criteria for constituent selection, weighting, and review schedules.
- Benchmarking: The index may be used as a reference point when evaluating the performance of PSU-focused investment products and portfolios.
Risks associated with BSE PSU Index
Like all equity market indices, the value of the BSE PSU Index is subject to risk.
Some key risks include:
- Market risk: The index may be affected by broader equity market movements, economic conditions, and investor sentiment.
- Sector concentration risk: A substantial portion of the index may be concentrated in a limited number of sectors. This can make it more volatile than broad market indices.
- Regulatory and policy risk: Public sector undertakings may be affected by government policies, regulatory changes, and sector-specific developments.
- Volatility risk: The index may experience fluctuations in value over short- and medium-term periods.
BSE PSU Index vs BSE CPSE Index
The BSE PSU Index and the BSE CPSE Index differ primarily in their eligible universe.
The BSE PSU Index includes companies classified as public sector undertakings under the applicable methodology.
The BSE CPSE Index is limited to Central Public Sector Enterprises (CPSEs), which the BSE defines any public sector undertaking where the central government or any other CPSE holding is 51% or more. Public sector banks are not classified as CPSEs for the purpose of the index.
Both indices use a float-adjusted market capitalisation methodology and are reviewed semi-annually. However, the companies eligible for inclusion differ between the two indices.
Historical performance of the BSE PSU Index
According to the BSE factsheet the BSE PSU Index, the historical returns of the BSE PSU index are as follows as on May 29, 2026, are as follows:
| Return window | Total Returns | Price Returns |
| 1 Month | -3.98% | -4.30% |
| 3 Month | -6.10% | -6.54% |
| YTD* | 2.64% | 1.80% |
| 1 Year | 9.12% | 6.46% |
| 3 Years | 30.00% | 26.43% |
| 5 Years | 26.69% | 22.45% |
| 10 Years | 16.71% | 12.84% |
*YTD returns are for the calendar year | Returns up to 1 year are absolute, while returns for periods greater than 1 year are annualised. | Past performance may or may not be sustained in future.
Source: BSE PSU Factsheet; BSE Index Services Ltd | Data as on May 29, 2026.
Conclusion
The BSE PSU Index is a benchmark that tracks the performance of eligible public sector undertakings listed on the BSE. It provides exposure to a diversified group of PSU companies across multiple sectors through a rules-based methodology. However, like all equity market indices, it remains subject to market volatility, sector concentration risks, and regulatory developments. Investors evaluating products linked to the index may benefit from considering their investment objectives, risk appetite, and investment horizon before making investment decisions.
FAQs
How is the BSE PSU Index calculated?
The BSE PSU Index uses a float-adjusted market capitalisation-weighted methodology. Companies with a larger free-float market capitalisation receive a higher weight within the index.
How can I invest in the BSE PSU Index?
Investors cannot invest directly in the index itself. Exposure may be obtained through eligible market-linked products such as index funds or ETFs that aim to track the index, where available.
What is the difference between BSE PSU and BSE CPSE Index?
The BSE PSU Index includes public sector undertakings that meet the applicable eligibility criteria, while the BSE CPSE Index is restricted to Central Public Sector Enterprises and excludes public sector banks from CPSE classification.
