The Nedungadi Bank counter witnessed hectic activity today on media reports that Punjab National Bank (PNB) is keen to take over the bank.
On the Bombay Stock Exchange, the stock hit a high of Rs 35 compared with its Monday's close of Rs 30.50 and settled at Rs 32.30 on profit-taking.
On the National Stock Exchange, close to 30,000 shares changed hands on the counter. Between August 8 and September 9, the scrip had lost 17.6 per cent to Rs 30.50. Dealers at a local brokerage house said, "Several speculators were active on the counter following the media reports."
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The Kochi-based bank was put on the block after the Reserve Bank of India (RBI) initiated moves to weed out the broker-promoter Rajendra Bhantia from the bank.
Bhantia and family hold a 32 per cent stake in the bank. Wednesday's rise in Nedungadi Bank is also on hopes that PNB may be asked to make an open offer to the shareholders of the southern bank in compliance with the Sebi takeover rules.
The banking division under the ministry of finance is currently processing PNB's application. Analysts say the takeover will prove mutually beneficial for both the banks. PNB's network is mostly concentrated in northern India. With the acquisition of Nedungadi Bank, it will be able to reach out to the south.
On the other hand, Nedungadi Bank, which is technically still owned by the stockbroker-led group, will be set free of broker-led influences and vested interests after it is taken over by PNB.