The Hindu Business Line : PNB up 7.4% on IFCI acquisition hopes

THE stock price of public sector Punjab National Bank (PNB) gained sharply in today's trading on market expectation that the Delhi-based bank would acquire financial institution, IFCI.

The Finance Minister, Mr Jaswant Singh, announced last week that the government has set April 1 as the target date for the merger of IFCI with a public sector bank.

In today's trading, the stock price of PNB gained 7.43 per cent at Rs 296.30 on BSE with a volume of 15.70 lakh shares, and on NSE, it closed at Rs 298.65, up 8.56 per cent with a volume of 41.86 lakh shares. Out of the total shares traded, 17.4 per cent were for delivery on BSE, and 20.51 per cent on NSE.

The possibility of merger of IFCI with PNB lifted the stock price of the Delhi-based financial institution too. The stock price gained 8.63 per cent at Rs 22.60 on BSE with a volume of 2.24 crore, and on NSE, it closed at Rs 22.65, up 8.63 per cent with a volume of 4.70 crore shares. Along with the huge volume recorded in the counter, the delivery ratio was also high on both the exchanges. On BSE, the delivery ratio was 29.63 per cent, and on NSE, it was 29.36 per cent.

PNB has gained over 60 per cent in the last one month, and IFCI has gained 36 per cent.

Brokers said the merger between PNB and IFCI is possible as both of them are based in Delhi and large portion of their loan portfolio is in North India. "With their strong positions in the North, a merger is very much possible", said a broker who is bullish on these two counters.

In addition, brokers said this will make both the institutions very strong even on national level and the possibility of further re-rating in these two stocks cannot be ruled out.

However, a senior official of a domestic broking firm said the bigger issue at the time of the merger would be the ratio at which the merger will happen.

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