PSU Bank Stake Sale: The government has approved the plan to sell stake in five public sector banks. CNBC-TV18 has given this information quoting sources. These include Bank of Maharashtra, UCO Bank, Indian Overseas Bank, Central Bank of India and Punjab and Sindh Bank. According to the report, this stake sale includes Qualified Institutional Placement (QIP) and Offer for Sale (OFS) of Rs 2000-2000 crore.
OFS route is still not clear. However, from the QIP portion it can be estimated how much stake the government will have in these five PSU banks after successful QIP.
At the current market price, Punjab & Sind Bank has the highest stake dilution, while Indian Overseas Bank has the least. Based on current prices, after successful QIP, the government’s stake in these banks could be as follows-
| bank | Government Stake (%) | Post QIP (%) |
| Bank of Maharashtra | 79.6 | 75.69 |
| Punjab & Sind Bank | 98.25 | 92.27 |
| iob | 96.38 | 94.44 |
| UCO Bank | 95.39 | 91.87 |
| Central Bank of India | 93.08 | 89.11 |
After QIP, there will be an improvement of 100 to 300 basis points in the Capital to Risk Asset Ratio (CRAR) of banks. In this situation, the biggest beneficiary will be Punjab and Sindh Bank, while the Tier-I ratio of Central Bank will be least affected.
| bank | Current Tier I Ratio (%) | Tier-I Post QIP (%) |
| Bank of Maharashtra | 13.13 | 14.43 |
| Punjab & Sind Bank | 14.55 | 17.57 |
| iob | 14.75 | 16.07 |
| UCO Bank | 14.59 | 16.10 |
| Central Bank of India | 14.01 | 15.0 |
After this news of CNBC-TV18, shares of these PSU banks registered a rise of 15% to 20% on Tuesday. The current value of the additional government stake is now around ₹50000 crore.
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