More Stories

Informist, Wednesday, Apr. 22, 2026

 

--Govt source:Indian Overseas Bk may tap mkt in Q2 to meet public float norm

--Govt source: UCO Bk may wait till Q2 to tap mkt to meet public float norms

--Govt source: Central Bk of India may tap mkt Q2 to meet public float norm

--Govt source:Punjab & Sind Bank may tap mkt in Q2 to meet public float norm

--Govt source: West Asia war delayed 4 PSU bks' plan to tap equity market

 

By Priyasmita Dutta and Sagar Sen

 

NEW DELHI – Four public-sector banks--Indian Overseas Bank, Central Bank of India, UCO Bank, and Punjab & Sind Bank--may have to hold their fund-raising plans until the September quarter given the current volatility in the equity market, delaying their original schedule by two quarters. According to two finance ministry officials, the government may also start diluting its stake in these banks only in the second quarter of 2026-27 (Apr-Mar). The hope is that the market will have stabilised by then. 

 

"The government had planned to cut (its) stake through offers for sale in these banks in Jan-Mar, but the market conditions changed...it is prudent to wait till the market recovers," one of the officials said. The second official said the banks may raise funds through qualified institutional placement only from the September quarter. Fundraising through QIP and offer for sale are expected to help the banks meet the Securities and Exchange Board of India's minimum public shareholding norms.

 

SEBI rules require all listed companies to have a minimum public shareholding of 25%. The Department of Financial Services had approved the fundraising plans of five public-sector banks through QIP and an offer for sale in the second half of FY26. These approvals are typically granted for a year, allowing the state-owned banks to hit the market at an opportune time.

 

In December, the government had offloaded 6% stake in Bank of Maharashtra and 2.17% stake in Indian Overseas Bank. Following the sale, the public shareholding in Bank of Maharashtra now stands at 26.4%, making it compliant with the SEBI norm. For Indian Overseas Bank, the public shareholding now stands at 7.56%. The government's stake in Central Bank of India, UCO Bank, and Punjab & Sind Bank stands at 89.27%, 90.95%, and 93.85%, respectively. 

 

Central Bank of India has 9.05 billion shares issued and outstanding. The government will have to sell 1.29 billion shares of the bank to meet the public shareholding norm. UCO Bank has 12.54 billion shares, and the government will have to sell 2 billion shares for the bank to meet the norm. Punjab & Sind Bank has 7.10 billion shares, and the government will have to sell 1.34 billion shares to meet the 25% public float norm. In Indian Overseas Bank, the government needs to sell 3.35 billion shares, out of the total 19.26 billion outstanding shares to meet the norm. This means the government will have to sell a total of 8 billion shares in these four banks to enable them to comply with the public shareholding norm. 

 

With regard to QIP, three of the four banks that do not comply with SEBI's norm planned to hit the market in the March quarter. Indian Overseas Bank had planned to raise INR 40 billion, Punjab & Sind Bank had planned to raise INR 30 billion, and UCO Bank had planned to raise INR 27 billion. "Generally, Feb-Mar is a good time for banks to raise funds as credit growth is strong at that time," the first official said. "The West Asia war changed the market outlook, and now the banks will be in wait-and-watch mode for some time."

 

Bank of Maharashtra, which is now compliant with SEBI's minimum public shareholding norm, also plans to raise funds through QIP in FY27 to boost its capital. Monday, its board approved raising INR 100 billion through infrastructure bonds, $500 million through external commercial borrowings, and INR 75 billion via QIP. Managing Director and Chief Executive Officer Nidhu Saxena said that beyond mobilising deposits, the bank will consider fundraising options to be able to achieve 18% credit growth in FY27. 

 

"We have been strategically exploring other areas, other ways and means to raise resources for funding this credit growth," he said at a press conference Monday. "...at the opportune time, we can look at it in terms of pricing and raise resources," he said. 

In the past two financial years, the bank had raised funds through the QIP route and through lowering of the government's stake through an offer for sale. "That fundraising was deployed to fund the credit growth," Saxena said, adding that the bank was "adequately capitalised as of now". Its capital adequacy ratio at the end of March was 18.36%, and in FY27, the bank aims to maintain a ratio of around 18%.

 

As such, the four other PSU banks are also well capitalised with healthy capital adequacy ratios. UCO Bank's ratio at the end of December was 17.43%, Punjab & Sind Bank's was 16.83%, Indian Overseas Bank's was 16.30%, and Central Bank of India's was 16.13%. The Reserve Bank of India mandates all scheduled commercial banks to maintain a minimum capital adequacy ratio of 9%.  End

 

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.