Nifty PSU Bank index gains 4%; Central Bank of India, IOB surge 20%

Shares of Central Bank of India and Indian Overseas Bank locked in 20% upper circuit on reports that the two financial institutions might be privatised.

Shares of Central Bank of India and Indian Overseas Bank (IOB) were locked in 20 per cent upper circuit on the National Stock Exchange (NSE) on Monday on the back of heavy volumes amid reports that the two financial institutions might be privatised.

The Centre has shortlisted Central Bank of India and Indian Overseas Bank for divestment, according to a report by TV channel CNBC Awaaz. The two lenders might see 51 percent sale in the first phase of disinvestment, the report said.

The stock of the Mumbai-based Central Bank was locked in upper circuit at Rs 24.30 on the back of over two-fold jump in trading volumes. A combined 80.5 million shares have changed hands and there were pending buy orders for 2.9 million shares on the NSE and BSE.

Shares of Chennai-based IOB hit a 52-week high of Rs 23.60 on the NSE. The counter also saw a more-than-doubled trading volumes with a combined 71 million shares changing hands on the NSE and BSE. There were pending buy orders for 3.6 million shares on both the exchanges, data shows.

The privatisation plan was announced in the Union budget for 2021-22 as a part of the government’s broader divestment goals for FY22. It includes privatisation of several other non-financial state-owned entities and listing of the wholly-owned Life Insurance Corporation of India.

Meanwhile, Nifty PSU Bank index surged nearly 4 per cent at 2,472.75 on the NSE, as compared to 0.21 per cent rise in the Nifty50 index. Jammu & Kashmir (J&K) Bank and Punjab & Sind Bank from the index rallied 20 per cent and 18 per cent, respectively. Bank of Maharashtra, Union Bank of India, Bank of India and Uco Bank were up in the range of 6 per cent to 8 per cent.