The Nifty PSU Bank rose 0.96% to 2,391.65, rising 1.44% in two sessions.
Indian Bank (up 4.12%), Central Bank of India (up 1.94%), PNB (up 1.83%), Indian Overseas Bank (up 1.75%), Canara Bank (up 1.59%), Punjab & Sind Bank (up 1.19%), Bank of Baroda (up 1.09%), Bank of Maharashtra (up 0.83%), UCO Bank (up 0.76%), Jammu & Kashmir Bank (up 0.69%), Union Bank of India (up 0.58%), Bank of India (up 0.19%) and State Bank of India (up 0.13%) advanced.
The buying interest was triggered by media reports suggesting that lenders led by State Bank of India (SBI) are set to recover Rs 37,400 crore this week as Piramal Capital and Housing Finance's (PCHF) acquisition of Dewan Housing Finance (DHFL) should be completed this month itself.
DHFL has been undergoing insolvency proceedings at National Company Law Tribunal (NCLT) in Mumbai since 3 December 2019.
DHFL had gone bankrupt with more than Rs 90,000 crore in debt to various lenders, including banks, mutual funds and individual investors who kept fixed deposits with the company. The lenders of the company had classified the account as a fraud on alleged fund diversion by promoters Kapil Wadhawan and his brother Dheeraj Wadhawan.
In January 2021, Piramal Capital and Housing Finance, a subsidiary of Piramal Enterprises, had won a bid for acquiring DHFL. Piramal made Rs 37,250-crore bid to acquire the housing finance company. The resolution plan received approvals from RBI in February 2021 and the Competition Commission of India (CCI) in April 2021. The resolution plan was approved by the Mumbai bench of the National Company Law Tribunal in June.
The resolution plan involves Piramal Capital taking over DHFL and making payments to lenders, which can be implemented in full only after 90% of the financial creditors sign the execution documents.
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Creditors led by SBI had admitted claims worth over Rs 87,000 crore. In this, SBI had exposure of Rs 7,267 crore to Dewan Housing Finance. Bank of India claimed Rs 4,125 crore while Union Bank of India had an exposure of Rs 3,605 crore, reports added.
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