PSU bank stocks on Tuesday surged up to 11 per cent amid reports that the finance ministry is likely to infuse about Rs 100 billion within a few days in some state-owned lenders to help them meet regulatory capital requirement.
Shares of Corporation Bank zoomed 10.88 per cent, Allahabad Bank 7.23 per cent, Punjab National Bank 6.57 per cent, Bank of Baroda 6.38 per cent, Bank of India 5.87 per cent, Canara Bank 5.71 per cent and Indian Bank 5.04 per cent on BSE.
"PSU banks outperformed due to prospects of govt's recapitalisation plan," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.
The finance ministry is likely to infuse about Rs 100 billion within a few days in some state-owned lenders including PNB, Corporation Bank and Central Bank of India, to help them meet regulatory capital requirement, sources said.
The infusion would be part of remaining Rs 650 billion out of Rs 2.11 trillion capital infusion over two financial years.
The new round of infusion will be between Rs 80 billion and Rs 100 billion, sources said.