SBI, other PSU bank stocks rally up to 3% as FinMin pushes for monetisation of subsidiary investments
Shares of
public sector banks
(PSBs) rallied up to 3% on Monday after the finance ministry directed them to monetise their investments in subsidiaries and joint ventures through stock market listings.
Central Bank of India
shares led the gains among PSBs, surging 2.5% to an intraday high of Rs 40.14. This was followed by
Canara Bank
,
Bank of Baroda
, Bank of India, and Union Bank of India, each rising 2.3% to hit intraday highs of Rs 113, Rs 247, Rs 119, and Rs 152, respectively.
Indian Bank
shares rose 1.9% to reach Rs 638.65, while
Indian Overseas Bank
shares advanced 1.2%, hitting a high of Rs 38.82. Meanwhile,
SBI
shares touched a high of Rs 813.60, marking a more modest gain of 1% from its previous close.
The move is aimed at unlocking value after scaling up the operations of these subsidiaries and realising better returns on investment.
According to the finance ministry's communication, about 15 subsidiaries or joint ventures of public sector banks are being lined up for potential initial public offerings (IPOs) or divestments in the medium to long term.
Banks have been asked to enhance governance standards and operational efficiency in their subsidiaries as a precursor to monetisation.
In the case of SBI, the government-owned lender may consider listing its two prominent subsidiaries, SBI General Insurance and SBI Payment Services, after they expand their operational footprint further.
SBI General Insurance Company, incorporated in February 2009, earned a profit of Rs 509 crore in the financial year ended March 2025. During the year, it issued 3,71,693 equity shares of Rs 10 each, which led to a marginal reduction in SBI's stake in the insurance arm from 69.11% to 68.99%.
SBI Payment Services, which operates in the merchant acquiring segment, is 74% owned by SBI, with the remaining stake held by Hitachi Payment Services. The company has emerged as one of the largest acquirers in the country with over 33.10 lakh merchant payment acceptance points, including 13.67 lakh point-of-sale (POS) machines, as of March 31, 2024.
Canara Bank is also likely to be in the spotlight after initiating the process for listing its asset management joint venture, Canara Robeco AMC.
Additionally, the lender has approved the dilution of a 14.5% stake in its life insurance venture, Canara HSBC Life Insurance Company, as part of its broader monetisation plans.
Also read:
Nifty ready to scale new highs on bullish mood: Analysts
(
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: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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