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Pick Indian Overseas Bank, OBC, Andhra Bank: Prakash Diwan

Prakash Diwan of Altamount Capital Management is of the view that one can pick Indian Overseas Bank, Oriental Bank of Commerce and Andhra Bank.

May 11, 2017 / 05:19 PM IST

Prakash Diwan of Altamount Capital Management told CNBC-TV18, "What has happened is the past two days is that profit booking has been seen on the back of the event playing out which was the NPA ordinance and the attendant issues thereafter. When people realised that this is more like a work in progress, it is a great start of sorts but it is going to take a while before things start impacting P&Ls and balance sheets, there has been a cool-off."

"What is going to happen is there is going to be a second wave of buying that should come in PSU banks whether it is precipitated by the announcement of mergers, some other clean up or some other steps but I think the dirtier ones are going to get lapped up much is my sense."

"So, look at an Indian Overseas Bank (IOB), I have been talking about this at Rs 27-28 levels as well. It has an 80 percent ownership from the government, it has got about 10 percent institutional ownership, a very little floating stock. There could be a lot of changes happening with M&A wave that gets initiated with the smaller banks," he said.

"The other would be Andhra Bank, you could probably look at Oriental Bank of Commerce (OBC) qualitatively amongst the better ones, it has probably run up a bit. However if it comes down that would be my third pick. So, look at some of the unsung heroes of sorts in this rally and these stocks could probably see a lot of buying in the next wave. So, Andhra Bank, OBC and IOB definitely would look at adding them up," he added.
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