Stocks that touch 52 weeks high
Indian Overseas Bank (IOB) and Central Bank of India (CBI) shares jumped 18% and 16%, respectively, in early trade on Tuesday amid reports that the government has shortlisted these banks for privatisation. Indian Overseas Bank touched a 52-week high of ₹27.95 and Central Bank of India touched a 52-week high of ₹28.30 on BSE.
As per the media reports, Central Bank of India and Indian Overseas Bank might see 51 percent sale in the first phase of disinvestment. The government may amend the Banking Regulations Act and Banking Law Act during Parliament's Monsoon session to privatise the two state-run banks. The move comes after Union finance minister Nirmala Sitharaman announced during her Budget 2021 speech in February that two public sector banks (PSBs) would be privatized in 2021-22.
The weak financial metrics of lenders like CBI and IOB could lead to unexpected hurdles in the government's plan to privatise the lenders as per the market experts.
Both the IOB and CBI are currently under the Prompt Corrective Action (PCA) framework imposed by the Reserve Bank of India (RBI). Under the PCA framework, the central bank imposes certain business restrictions on lenders with weak financial metrics.
The Centre has set an ambitious divestment target of Rs 1.75 lakh crore for FY22.
At 11:50 am, Indian Overseas Bank was quoting at Rs 25.65, up Rs 2.05, or 8.69 % and Central Bank of India was quoting at Rs 26.00, up Rs 1.70, or 7.00% up on the BSE.
Disclaimer: The above report is compiled from information available on the public platforms. These are not buy or sell recommendations.
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