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Informist, Friday, Dec. 19, 2025

 

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--Fin min source: Govt likely to sell stake in 3 PSU banks soon via OFS
--Fin min source: Govt to sell stake in 3 PSU bks to meet public float norm
--Govt source: To sell stake in UCO Bk via OFS soon to meet public float norm
--Govt source: To cut stake in Central Bank to meet public float norm
--Fin min source: To sell stake in Punjab & Sind Bk to meet public float norm
 

 

By Priyasmita Dutta

 

NEW DELHI – The government will likely dilute its stake in three public sector banks--Central Bank of India, UCO Bank, and Punjab & Sind Bank--soon through the offer-for-sale route, a senior finance ministry official said. The move will help these banks meet the Securities and Exchange Board of India's minimum public shareholding norm.

 

"Government will sell stake in these banks over the next few weeks," the official told Informist, without divulging more details. 

 

SEBI rules require all listed companies to have a minimum public float of 25% and currently, four of the 12 public sector banks do not comply with the minimum public shareholding norms. These are Central Bank of India with a public shareholding of 10.7%, UCO Bank with 9.1%, Punjab & Sind Bank with 6.2%, and Indian Overseas Bank with 5.4%. In April last year, the finance ministry had asked these banks, along with Bank of Maharashtra, to increase their minimum public shareholding to 25% by Aug. 1, 2026.

 

Earlier this month, the government offloaded a 6% stake in Bank of Maharashtra to make it compliant with the SEBI norm. The government had offered to offload a 5% stake in the bank through the offer for sale, with an option to sell an additional 1%. The government is also in the process of selling a 2% stake in Indian Overseas Bank through an offer for sale, with a green shoe option for an additional 1%. 

 

Following the sale of the stake in Bank of Maharashtra, the public shareholding in the bank now stands at 26.4%. In the case of Indian Overseas Bank, once the government sells a 3% stake, the public shareholding in the bank will increase to 8.4%.

 

"The government approved lowering stake through OFS in these five banks at the same time, and the timeline is dependent on market conditions," the official said. "There is strong demand from retail and non-retail investors currently."

 

According to the official, while the upcoming stake sale process will help lower the government's shareholding, there may be a little left to cover for the banks to meet the public shareholding norm. "It is tough for government to cut stake by as much as 15-20% at one go," the official said. "Banks still have time till August to meet the norms," the official added.

 

For the quarter ended September, Central Bank of India reported a net profit of INR 12.13 billion, UCO Bank reported a net profit of INR 6.20 billion, and Punjab & Sind Bank reported a net profit of INR 2.95 billion. At 1027 IST, shares of Central Bank traded 0.4% higher at INR 36.15 on the National Stock Exchange and shares of UCO Bank traded 0.2% higher at INR 28.59. Punjab & Sind Bank's shares traded 0.3% higher at INR 26.86.  

 

Central Bank of India has 9.05 billion shares issued and outstanding and the government will have to sell 1.29 billion shares for the bank to meet the public shareholding norm. Similarly, 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. The government will have to sell a total of 4.63 billion shares in these three banks to enable these banks to comply with the 25% public shareholding norm.

 

If the government sells 4.63 billion shares of these three banks at the current trading price, it will get INR 140 billion.  End

 

Edited by Akul Nishant Akhoury

 

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