Groww Mutual Fund has launched a new passive investment product — the Groww Nifty PSU Bank ETF, an open-ended exchange-traded fund that seeks to track the performance of the Nifty PSU Bank Index – Total Return Index (TRI), subject to tracking error.
The exchange-traded fund (ETF) aims to provide investors with a rules-based and transparent way to gain exposure to India’s public sector banking sector, which plays a central role in credit delivery across retail, corporate, MSME, agriculture and infrastructure segments.
Index composition
The Nifty PSU Bank Index tracks government-owned banks listed on the stock exchange that are involved in lending, deposit mobilisation and financial intermediation.
As of February 25, 2026, the top constituents by weightage include:
State Bank of India – 34.69%
Bank of Baroda – 13.64%
Canara Bank – 12.47%
Punjab National Bank – 10.48%
Union Bank of India – 8.96%
Indian Bank – 8.09%
Bank of India – 4.97%
Bank of Maharashtra – 3.51%
Indian Overseas Bank – 1.24%
Central Bank of India – 0.91%
Despite strong performance, the index currently trades at a price-to-earnings (PE) multiple of 9.75x, lower than its five-year average of 11.45x and 10-year average of 20.24x.
Scheme details
Key features of the Groww Nifty PSU Bank ETF include:
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Minimum investment: ₹500 -
Exit load: Nil -
Benchmark: Nifty PSU Bank Index – TRI -
Fund managers: Nikhil Satam, Aakash Chauhan and Shashi Kumar
Source: NSE, Feb 25, 2026 | Compound annual growth rate
Past performance may or may not be sustained in future and is not a guarantee of any future returns. The above is the performance of the index and does not in any manner indicate the performance of any individual scheme of the mutual fund. Please consult your financial advisor before investing.
The index currently trades at a PE of 9.75x compared to its 5-year average of 11.45x and 10-year average of 20.24x.
Public sector banks continue to hold a dominant position in India’s banking system. According to Reserve Bank of India data, PSU banks account for more than half of the total assets of scheduled commercial banks in the country.
The segment has also seen improvements across key financial metrics in recent years.
Asset quality:
Gross and net non-performing assets (NPAs) of PSU banks have moderated significantly from earlier elevated levels.
Capital position:
The capital adequacy ratio of PSU banks stood at 16.1% in FY25, compared with around 11–12% in previous years. The provision coverage ratio (PCR) exceeded 94% in FY25, indicating a higher share of stressed assets covered by provisions.
Profitability:
Return metrics have improved, with return on equity (ROE) and return on assets (ROA) moving upward in recent years.
Loan growth and profitability:
Credit growth has also remained strong, with loan advances expanding by more than 10% annually during FY23–FY25.
Aggregate net profits of PSU banks rose sharply from ₹31,820 crore in FY21 to ₹1,78,364 crore in FY25.
Policy support and structural changes
The sector has also benefited from policy and structural initiatives aimed at strengthening governance and balance sheets.
These include the Banking Laws (Amendment) Act, 2025, operational initiatives under the Enhanced Access & Service Excellence (EASE) programme, and the establishment of the National Asset Reconstruction Company Limited (NARCL) in 2021 backed by a government guarantee of ₹30,600 crore.
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