PSB Stake Sale: Bank of Maharashtra, UCO Bank and IOB Shares Slipped Heavily

On January 15, 2025, the public sector banks such as Bank of Maharashtra, Punjab & Sind Bank, Indian Overseas Bank, UCO Bank and Central Bank of India traded lower after the Government’s divestment plan in these public sector banks as mentioned in various news reports.

Objective of Divestment

As per news reports, the government has approved a fund raising plan to the tune of ₹10,000 crore for five state-run lenders through the Qualified Institutional Placement (QIP) route.

With this move, the government aims to comply with the 25% minimum public shareholding requirement for these PSU banks by August 2026. These state-owned lenders fall under the administrative control of the Department of Financial Services.

Government’s Holding in PSBs

As of the end of the December quarter, the government holds a 79.6% stake in Bank of Maharashtra, 98.25% in Punjab & Sind Bank, 96.38% in Indian Overseas Bank (IOB), 95.39% in UCO Bank, and 93.08% in Central Bank of India, according to the latest shareholding data from BSE.=

On January 15, 2025, the Bank of Maharashtra share price traded 4.24% lower at 10:15 AM and touched the day low of ₹49.90 after opening at ₹51.50 on BSE. Punjab & Sind Bank shares slipped 5% in morning trade. The other 3 lenders, IOB share price, UCO Bank share, and Central Bank shares slipped 8% each.

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