Don't rush to buy public sector bank stocks post recap plan, say analysts

Post this capital infusion, the common equity tier 1 (CET1) ratio for all PSU banks would reach over 8.5 per cent, with net stressed assets reducing to 102% of net worth from 117%, reports suggest

Despite the capital infusion of Rs 881 billion announced by the government across public sector banks (PSB), investors should not rush to buy these PSBs but evaluate on a case-to-case basis and invest selectively, analysts say.

As a part of the Rs 2.1-trillion bank recap plan spread over FY18 and FY19 announced on October 25, 2017, the government on Wednesday announced Rs 881.39 billion capital infusion in 20 public sector banks (PSBs) during the current fiscal, with IDBI Bank cornering a lion's share of Rs 106.1 billion.

Post this round of capital infusion, the common equity tier 1 (CET1) ratio