India plans minority stake sale in four state-run banks, source says

Central Bank of India

19/11/2024 04:30

By Nikunj Ohri
       NEW DELHI, Nov 19 (Reuters) - The Indian government is
considering selling minority stakes in four state-run banks to
comply with public shareholding norms mandated by the country's
markets regulator, a government source told Reuters.
    The finance ministry is likely to seek approval of the
federal cabinet in the coming months to dilute the stake in
Central Bank of India  CBI.NS , Indian Overseas Bank  IOBK.NS ,
UCO Bank  UCBK.NS , and Punjab and Sind Bank  PUNA.NS , the
source said.
    The Indian government owns more than 93% in Central Bank of
India, 96.4% in Indian Overseas Bank, 95.4% in UCO Bank and
98.3% in Punjab and Sind Bank as of end-September, according to
data on the BSE's website.
    The plan under consideration is to sell the stake through an
offer for sale in the open market, the source said.
    The Securities and Exchange Board of India (SEBI) requires
listed companies to maintain a 25% public shareholding, but has
exempted government-owned firms from meeting these norms till
August 2026.
    The source did not comment on whether the government will be
able to meet the regulator's deadline or whether it would seek a
further extension.
    The official said the timing and the quantum of the sale
would be decided based on market conditions. The official did
not want to be named as he is not authorised to speak to the
media.
    India's finance ministry did not immediately respond to a
request for comment.
    In the past, public sector banks have launched qualified
institutional placements (QIP) to raise capital which has in
turn lowered the government's stake in state-run banks.
    Punjab National Bank raised 50 billion rupees through a QIP
in September, while Bank of Maharashtra raised 35 billion rupees
in October.

 (Reporting by Nikunj Ohri; Editing by Varun H K)
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Messaging: twitter.com/nikunj_ohri))