PSU bank stocks in demand; gain up to 5%

Shares of public sector banks surged up to 5.3 per cent today as investors cheered the acquisition of debt-laden Bhushan Steel under the Insolvency and Bankruptcy Code (IBC) framework that will reduce bad loans of PSBs.

The scrip of Bank of India soared 5.31 per cent, Punjab National Bank 4.62 per cent, Union Bank of India 4.38 per cent, Bank of Maharashtra 3.03 per cent, Syndicate Bank 2.65 per cent, Bank of Baroda 2.49 per cent and SBI 2.47 per cent on BSE.

Also, Indian Bank rose by 2.21 per cent, Allahabad Bank 1.99 per cent and Oriental Bank of Commerce 1.59 per cent.

The acquisition of debt-laden Bhushan Steel, under the Insolvency and Bankruptcy Code framework, will reduce bad loans of PSBs by Rs 35,000 crore, Financial Services Secretary Rajiv Kumar said today.

"IBC transforming credit culture in NewIndia. About Rs 35,000 crore reduction of NPAs of PSBs in Bhushan Steel case. Reduction of NPAs in individual PSBs range from about Rs 500 crore to over Rs 10,000 crore, he tweeted.

Last week, Tata Steel, through its subsidiary, completed the acquisition of controlling stake of 72.65 per cent in Bhushan Steel for around Rs 36,400 crore after emerging as the winning bidder in an insolvency auction.