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Shares of state-run lenders jumped on reports of capital infusion infusion into 5 PSU banks. Nifty PSU bank index gained as much as 1.5 per cent.
The Finance Ministry had on Tuesday gave its nod for capital infusion of Rs 11,336 crore in five weak public sector banks to help them tide over any situation of breach of regulatory capital requirements.
The five banks that are to get capital support under this round are Punjab National Bank (Rs 2,816 crore); Indian Overseas Bank (Rs 2,157 crore); Andhra Bank (Rs 2,019 crore); Corporation Bank (Rs 2,555 crore) and Allahabad Bank (Rs 1,790 crore).
“It is a good move though not sufficient, but better than having nothing as banks will get some relief,” said AK Prabhakar, head of research, IDBI Capital.
“However, we expect more recapitalisation in these banks as we need healthy PSU banks for important segments like rural, and segments where only PSU banks lend like agriculture, education,” Prabhakar added.
IOB shares surged as much as 13.8 per cent to their highest since June 26. It posted biggest intraday gain since October 25, 2017.
PNB stock gained as much 4.1 per cent to Rs 81.95, its highest in over 3 weeks, while Corporation Bank shares hit a 4-week high rising as much as 10.1 per cent to Rs 28.95. Andhra Bank shares surged as much 5.3 per cent to Rs 32.6.
(With inputs from Reuters)
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