The shares of public sector banks rose in trade on October 28 after a Reuters report said that India is planning to more than double the current foreign investment cap in state-run lenders to 49 percent. The rise in the share prices pushed the Nifty PSU bank index more than 1.6 percent higher in the early trading hours.
The Nifty PSU bank index hit an intraday high of 8,118.95, before paring some gains to stand at 8,049.05 (0.7 percent higher), as seen at 9.50 am.
India planning to allow 49% foreign investment in PSU banks: Report
Indian government is planning to allow up to 49 percent direct foreign investment in state-run banks, Reuters reported on October 27, citing people familiar with the matter. The Ministry of Finance has been discussing the matter with the Reserve Bank of India (RBI) over the past couple of months, the report added.
PSU banks are also seeing interest from overseas investors and raising the foreign ownership limit will help them gain more capital in the coming years, sources told Reuters.
Moneycontrol couldn't independently verify the report.
The report comes as several foreign companies continue to invest in private lenders. In May this year, Japanese conglomerate SMBC inked a deal with State Bank of India (SBI) and seven other stakeholders to purchase a 20 percent stake in Yes Bank for $1.6 billion.
Federal Bank on Friday announced that Blackstone will invest around $705 million in the lender in exchange for a 9.9 percent stake in the bank. The deal will make the international private equity firm the largest shareholder in the bank.
Top gainers on Nifty PSU index:
Indian Bank shares gained nearly 1.5 percent to trade at Rs 838.05 apiece. Union Bank of India shares gained more than 1 percent. Bank of Maharashtra and Punjab National Bank (PNB) shares gained nearly 1 percent each.
State Bank of India (SBI), Bank of India, Bank of Baroda, Punjab & Sind Bank (PSB), Canara Bank and UCO Bank shares were trading in the green with marginal gains.
Central Bank of India and Indian Overseas Bank (IOB) shares however bucked the trend to trade in the red with marginal losses.
Nifty PSU index extends gains:
The Nifty PSU bank index has now extended gains for the second consecutive session. The index had surged more than 3 percent earlier yesterday to hit a high of 8,053.40. The index then pared some gains to close more than 2 percent higher at 7,990.65 on October 27.
Also read: Our LIVE blog on stock market updates
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
