PSU bank shares jump up to 20% after govt OKs stake sales, QIPs in UCO Bank, IOB, Bank of Maharashtra, others

Punjab & Sind Bank, IOB Among 5 PSBs to raise Rs 2,000-cr via QIP Starting Q4FY25

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26 Aug, 2025 12:21

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Shares of PSU banks including Indian Overseas Bank, Bank of Maharashtra and Punjab & Sind Bank surged up to 20 percent on January 14 after the government approved fund-raising plans of up to Rs 10,000 crore for five PSBs through QIP, and additional stake sales via OFS.

The government approval is for qualified institutional placement (QIPs) of Rs 2,000 crore each, and offer for sale (OFS) of five banks -- Indian Overseas Bank, Bank of Maharashtra, Punjab & Sind Bank, UCO Bank and Central Bank of India, CNBC-TV18 reported citing sources.

The fund-raising will be executed in small tranches beginning the current financial year. The Department of Investment and Public Asset Management (DIPAM) has also been mandated to divest stakes via OFS to increase the public shareholding, said the report.

The move aligns with the government’s efforts to adhere to the 25 percent minimum public shareholding norm by August 2026. All five lenders are under the administrative control of the Department of Financial Services.

The government holds a 79.6 percent stake in Bank of Maharashtra, while it owns a 98.25 percent stake in Punjab & Sind Bank, 96.38 percent stake in Indian Overseas Bank, 95.39 percent stake in UCO Bank and 93.08 percent stake in Central Bank of India at the end of the December quarter, according to the latest shareholding pattern on BSE.

Following the report, the Indian Overseas Bank share price surged 20 intraday to a high of Rs 54.54. UCO Bank shares too jumped up to 20 percent. Central Bank shares jumped 20 percent, while shares of Punjab & Sind Bank and Bank of Maharashtra rose 15 percent and 17 percent, respectively.

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