Shares of the Central Bank of India and Indian Overseas Bank extended gains on Tuesday on reports that the central government has shortlisted these banks for divestment. Both stocks also hit their respective 52-week highs in trade today after being frozen in their 20 percent upper circuits in the previous session post the report.
Indian Overseas Bank rose as much as 18.4 percent to its 52-week high of Rs 27.95 on Tuesday. Meanwhile, the Central Bank of India surged 16.4 percent to its 52-week high of Rs 28.30.
As per a report by CNBC Awaaz, these two lenders might see a 51 percent sale in the first phase of disinvestment. The government is likely to amend the Banking Regulations Act and Banking Law Act during the monsoon session of Parliament to privatize the two-state-run banks, the report suggests.
In the Union Budget 2021, finance minister Nirmala Sitharaman announced the decision to privatise two public sector banks (PSBs) in 2021-22.
NITI Aayog recently submitted a report to the core group of secretaries on disinvestment mentioning the names of these two banks. The government think tank is responsible for suggesting names of PSUs in strategic sectors to be merged, privatised, or made subsidiaries of other PSUs.
The Centre has set an ambitious divestment target of Rs 1.75 lakh crore for FY22. The government's plans to sell its stakes in Air India, Bharat Petroleum Corporation (BPCL), Shipping Corporation of India, and some other companies have been disrupted due to the COVID-19 pandemic.
First Published: IST