Market Performance
Shares of Punjab & Sind Bank, UCO Bank, and Central Bank of India attracted attention on March 25, 2025, following their announcements to raise capital through Qualified Institutional Placement (QIP).
- Punjab & Sind Bank: Share price increased by 13.25% to ₹50.49.
- UCO Bank: Share price declined by 2.43% to ₹37.31.
- Central Bank of India: Share price fell by 2.66% to ₹45.60.
Capital Raising Announcements
The boards of these public sector banks (PSBs) have approved fundraising through QIP to issue shares to institutional investors. This move aligns with the government's initiative to raise ₹10,000 crore across five PSU banks, ensuring compliance with minimum public shareholding norms.
UCO Bank QIP
- Initiation Date: March 24, 2025.
- Fundraising Target: ₹2,000 crore.
- Floor Price: ₹36.07 per share.
- Government Stake: Expected to decrease by 3%, reducing the current 95.39% holding.
Central Bank of India QIP
- Initiation Date: March 24, 2025.
- Floor Price: ₹42.62 per share, determined by SEBI's pricing formula.
Punjab & Sind Bank QIP
- Floor Price: ₹40.38 per share.
- Fundraising Target: ₹2,000 crore.
- Discount Provision: The bank may offer up to a 5% discount on the floor price during the issuance.
Context of the Capital-Raising Efforts
These QIP initiatives are part of a larger strategy to strengthen the capital base of public sector banks while adhering to regulatory mandates for minimum public shareholding. The banks aim to enhance their financial stability and meet compliance standards by issuing shares to institutional investors.
Summary
Punjab & Sind Bank, UCO Bank, and Central Bank of India have initiated capital-raising processes through Qualified Institutional Placement. Each bank has set a floor price and specified fundraising targets, with UCO Bank and Punjab & Sind Bank seeking to raise ₹2,000 crore each. These steps are aligned with broader efforts to ensure regulatory compliance and strengthen capital reserves in the public banking sector.
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