Which is a better choice , 'doing an MTech from an IIT' or 'get into a PSU?

First of all, you would have to see two aspects, first which IITs and which branch you would be getting and second what kind of a career do you want to pursue.
Now I am assuming that since you are expecting selection in PSUs, you, therefore, would be having a decent rank and hence, you would be able to get a good IIT and a good branch.
Now comes the most important part. You must be clear about your area of interest and the type of career you want to pursue. If you are looking for a technically inclined job, go for PSUs like PGCIL, DMRC, BARC, BHEL, ISRO, DRDO, MDL and a few more which I might be missing. These PSUs give a good exposure in terms of technical knowledge apart from administrative work. Now if you want a hardcore technical job with quick promotions and pay raises and are willing to work hard get into an IIT K, D, B, R, C, H, Kgp and try to give your best there. You will surely succeed in getting a decent placement if you work considerably hard. You will also have an option of going for research later. If you belong to a tier 2 college like me, trust me it would be worth the experience.
The third category is if you are fine with doing not much technically inclined job and want a good starting salary and status in society go for PSUs like IOCL, NTPC, state government boards, AAI, SAIL, ONGC, CIL etc. In most of these PSUs, you will be able to lead a very comfortable and stable lifestyle with not much workload (most of the times).
I would also strongly recommend you to talk to people already working in the PSU before applying to it so that you know what kind of a work you are getting into. Although even after getting into a company there are different profiles it's always good to have an idea about the prospects.
Both are equally good opportunities. Just see that which one aligns with your interest and you'll do great.