 "Four state-owned banks may be approved to raise funds in H1 of FY25")
The central government is considering permitting at least four state-owned banks to raise funds or expand their public float in the first half of the next financial year (FY25) to boost their lending activities and increase public participation, according to a report by The Economic Times (ET).
The four lenders in question include PNB, aiming for a follow-on public offer (FPO) by September, and Central Bank of India, which is seeking approval for an offer for sale (OFS) to expand its public float.
The government has reportedly received a proposal from the Central Bank of India for an offer for sale, with the government currently holding a 93.08 per cent stake in the state-owned lender. Additionally, some banks may have already received approvals from their boards while others are preparing their fundraising proposals.
The market capitalisation of five state-run banks - PNB, Bank of Baroda, SBI, Union Bank of India, and IOB - have surpassed Rs 1 trillion each in the current financial year.
PNB informed ET that the bank's board has already approved a proposal to raise Rs 7,500 crore in equity capital in FY25. The bank had planned to raise funds in the first half of the next fiscal through an FPO or Qualified Institutional Placement (QIP).
An official from Punjab & Sind Bank mentioned that the lender may pursue its plan to raise Rs 250 crore through the QIP route in the next financial year, with the timing to be decided based on capital needs.
In India, there are 12 public sector banks (PSBs). This includes State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda, Bank of India (BOI), Central Bank of India, Canara Bank, Union Bank of India, Indian Overseas Bank (IOB), Punjab & Sind Bank, Indian Bank, UCO Bank, and Bank of Maharashtra
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