Good afternoon :)

List of Best PSU ETFs in India 2026

India’s PSU banking segment remains strong in 2026, with the Nifty PSU Bank Index rising about 31% in 2025, outperforming the broader market. The index continues to trade near multi-year highs, supported by rising credit demand, which crossed ₹200 lakh cr in late 2025, and steady improvements in PSU bank asset quality.

Top PSU ETFs in 2026

PSU ETF Stock Screener

PSU ETF Stock Screener: Analyse & Filter Indian Stocks on Tickertape

Showing 1 - 8 of 8 results

last updated at 6:30 AM IST 
NameStocks (8)Sub-SectorSub-SectorMarket CapMarket CapClose PriceClose PricePE RatioPE Ratio1D Return1D Return1M Return1M Return6M Return6M Return1Y Return1Y ReturnPB RatioPB RatioReturn on EquityReturn on EquityROCEROCEDividend YieldDiv YieldDebt to EquityDebt to EquityVolatility vs NiftyVolatility vs Nifty
1.Nippon India ETF Nifty PSU Bank BeESPSUBNKBEESEquityEquity362.85362.8598.8098.80--0.570.570.340.3429.0529.0542.0842.08------0.000.00--1.811.81
2.Kotak Nifty PSU Bank ETFPSUBANKEquityEquity166.15166.15885.00885.00--0.780.780.680.6829.3329.3341.1741.17------0.000.00--1.711.71
3.Mirae Asset Nifty PSU Bank ETFBANKPSUEquityEquity36.4236.4289.1389.13--0.620.620.650.6529.6429.6442.2042.20----------1.731.73
4.HDFC NIFTY PSU BANK ETFHDFCPSUBKEquityEquity31.3331.3389.4489.44--0.460.461.101.1028.9128.9141.9741.97----------1.691.69
5.Groww Nifty India Railways PSU ETFGROWWRAILEquityEquity21.9921.9933.8233.82--0.960.96-6.13-6.13-5.92-5.92-6.78-6.78----------1.981.98
6.DSP Nifty PSU Bank ETFPSUBANKADDEquityEquity21.6921.6989.5389.53--0.870.870.670.6729.6029.6042.6842.68----------1.721.72
7.ICICI Prudential Nifty PSU Bank ETFPSUBNKIETFEquityEquity14.2314.2389.6789.67--0.310.310.480.4828.9328.9342.2942.29----------1.711.71
8.SBI BSE PSU BANK ETFSBIBPBEquityEquity9.389.3851.4151.41--0.610.611.021.0228.7228.7242.4942.49----------1.731.73

Disclaimer: Please note that the above table is for informational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.

Selection criteria: Based on publicly available information | Sorted by market capitalisation from highest to lowest.

Overview of Top PSU ETFs in India

Nippon Nifty PSU Bank ETF

Nippon Nifty PSU Bank ETF tracks the Nifty PSU Bank Index and provides exposure to major public sector banks. The ETF reflects lending trends, credit growth, and improvements in capital adequacy across PSU banks. It also mirrors sector-wide movements driven by policy reforms, interest rate changes, and evolving asset-quality cycles in the Indian banking system.

Kotak Nifty PSU Bank ETF

Kotak Nifty PSU Bank ETF provides diversified access to India’s leading public sector banks by replicating the Nifty PSU Bank Index. It captures shifts in credit demand, recapitalisation measures, and regulatory developments that shape PSU banking performance. The ETF helps users follow sector-wide trends without tracking individual bank stocks.

DSP Nifty PSU Bank ETF

DSP Nifty PSU Bank ETF mirrors the Nifty PSU Bank Index and offers exposure to state owned banks that influence India’s credit and financial system. It reflects sector drivers including loan growth, provisioning levels, government reforms, and macroeconomic conditions that affect PSU banking operations and balance sheet strength.

ICICI Pru Nifty PSU Bank ETF

ICICI Prudential Nifty PSU Bank ETF replicates the Nifty PSU Bank Index and enables broad exposure to the public banking sector. The ETF’s performance links to lending cycles, regulatory guidelines, government capital support, and economic indicators that shape PSU banks’ credit, deposit, and asset quality trends.

HDFC Nifty PSU Bank ETF

HDFC Nifty PSU Bank ETF tracks the Nifty PSU Bank Index and provides access to India’s major government owned banks. It reflects structural factors including credit expansion, interest rate movements, operational efficiency, and policy driven sector reforms that influence PSU banks’ financial performance and market behaviour.

What are PSU ETFs?

PSU ETFs are exchange-traded funds that invest in a basket of Public Sector Undertaking (PSU) companies listed on Indian stock exchanges. These ETFs track indices of government-owned enterprises across sectors such as energy, banking, utilities, and infrastructure, offering a single-exposure route to the broader PSU segment.

How to Invest in PSU ETFs?

Here's how you can invest in PSU ETFs using Tickertape -

  1. Create an account on the Tickertape or log in if you already have one.
  2. Open Tickertape Stock Screener
  3. Filter PSU ETFs screener based on various parameters such as market cap, close price, past returns and more. You can review this data to evaluate each ETF’s performance trends and determine whether they align with your investment thesis.
  4. Once you’ve decided on an ETF, you can place a buy order through your brokerage account linked to Tickertape.

You can also stay updated on alerts and announcements for your favourite stocks with Tickertape Alerts. Further, you can analyse your overall portfolio and potential red flags in it by connecting it to Tickertape. Check out detailed analysis of your portfolio now!

Advantages of Investing in PSU ETFs in India

Strong Recent Performance of PSU Banks

The Nifty PSU Bank index surged about 31% in 2025, outperforming the broader Nifty 50 (which rose 10.2%), and marking the fifth consecutive year of relative strength for PSU banks. This trend directly influences ETFs tracking PSU banks.

Record Profit Growth Across PSBs

Public sector banks recorded ₹49,456 cr in combined net profit in Q2 FY26, up roughly 9% year-on-year, reflecting improving earnings and asset quality that can support ETF constituents’ fundamentals.

Steady Loan and Credit Growth

PSU banks reported advances growth between 7–20% in Q3 FY26, which in many cases outpaced private bank growth, showing renewed credit demand that ETFs tied to PSU bank indices may benefit from.

Improved Balance Sheets and Lower NPAs

PSBs reported healthier asset quality with Gross NPAs declining, and deposits and credit expanding. For example, in H1 FY26, PSU banks reported ₹93,675 cr in net profit, with NPAs at around 2.3%, indicating strength in core operations, as reflected in PSU ETF holdings.

Install the Tickertape app and enjoy a more hands-on investing experience
  • portfolio-iconReceive real-time market alerts for timely decisions
  • portfolio-iconMonitor your portfolio from the palm of your hands
  • portfolio-iconWatchlist stocks and mutual funds to stay updated

Risks of Investing in PSU ETFs in India

Sector Concentration Risk

PSU ETFs (often tracking the Nifty PSU Bank index) are heavily concentrated in public sector banks. While some PSU names performed well, sector correlation can amplify downside if banking sentiment weakens.

Cyclical Sensitivity to Credit and Interest Rates

PSU banks’ performance hinges on credit cycles, deposit-loan spreads, and net interest margins. A slowing growth environment or rising defaults can pressure profitability and ETF returns. (General banking sector risk pattern tied to credit cycles)

Profitability Moderation Expected in 2026

While PSBs showed robust gains in 2025, analysts expect some softening in net profitability in 2026 even as balance sheets remain solid, which could temper PSU ETF urgency.

Volatility Relative to Macro Conditions

PSU bank stocks, and thus PSU ETFs, remain sensitive to government policy, RBI rate shifts, and macro data. Sector volatility (positive or negative) in late 2025 impacted the Nifty PSU Bank Index at times.

Factors to Consider Before Investing in PSU ETFs

Index Structure and Weightings

The Nifty PSU Bank Index tracks major PSU banks, including SBI, Bank of Baroda, PNB, and Canara Bank, with significant weightings in a few names. ETF composition and weightings affect risk and returns, driven by these major banks’ performance.

Profit and Asset Quality Trends

Recent data shows PSBs posted combined net profits of tens of thousands of crores in FY26 and sustained strong credit growth. Monitoring future profit trajectories and NPA trends is crucial for the ETF outlook.

Loan vs Deposit Growth Dynamics

PSU banks’ credit growth outpaced deposit growth in late 2025, which may impact net interest margins and profitability for constituents within PSU ETFs.

Historical Performance vs Broader Markets

The PSU index’s strong multi-year rally, 31% in 2025, shows cyclical strength but also highlights the importance of evaluating long-term sustainability relative to other sector ETFs or broad indices.

Macro and Regulatory Environment

Public bank earnings and credit cycles remain tied to RBI policies, government budget support, banking reforms, and economic growth indicators. These broader forces can shape PSU ETF performance beyond individual bank metrics.

Taxation on PSU ETFs

PSU ETFs follow holding-period–linked taxation. Capital gains are taxed differently for short-term and long-term investments.

Holding Period Tax Treatment
Short-Term (< 12 months ) Gains taxed at a flat rate of 20% (increased from the previous 15%).
Long-Term (> 12 months) Gains taxed at 12.5%. Exemption applies to the first ₹1.25 Lakh of long-term gains across all equity assets in a financial year.

Conclusion

PSU ETFs provide structured exposure to India’s public sector banks by tracking indices like the Nifty PSU Bank Index, which has delivered notable recent returns and reflects broader sector strength. These ETFs track trends in credit growth, policy dynamics, and sector performance rather than movements in individual bank stocks. For clearer comparison and deeper analysis of PSU ETFs, covering index composition, returns, volatility, and fund metrics, investors can use the Tickertape ETF Screener, which offers detailed filters and historical data across the Indian ETF universe.

Frequently Asked Questions on PSU ETFs

  1. What are PSU ETFs?

    PSU ETFs are exchange-traded funds that invest in a basket of Public Sector Undertaking companies. These funds track indices composed of government-owned enterprises, often PSU banks, and allow investors to follow sector-wide performance through a single listed product.

  2. Is there any PSU ETF in India?

    The following PSU ETFs are based on 1-year returns: Nippon Nifty PSU Bank ETF; DSP Nifty PSU Bank ETF; HDFC Nifty PSU Bank ETF.

  3. How do Nifty PSU Bank ETFs work?

    Nifty PSU Bank ETFs replicate the Nifty PSU Bank Index, which includes major state-owned banks like SBI, Bank of Baroda, and PNB. The ETF holds the same stocks in the same weights, and its price movement mirrors the index.

  4. Are Nifty PSU Bank ETFs passively managed?

    Yes. These ETFs passively track the Nifty PSU Bank Index without active stock selection, which helps reduce tracking error.

  5. Are Nifty PSU Bank ETFs a good investment?

    Nifty PSU Bank ETFs move in line with sector trends such as credit growth, government policies, profitability cycles, and overall market conditions. Their suitability depends on personal goals, risk appetite, and horizon.

  6. How to sell psu ETFs?

    PSU ETFs can be sold through your demat account by placing a sell order on the exchange. The trade executes at market price and settles as per standard procedures.