The government has allowed public sector banks (PSBs) to raise additional capital to meet Basel-III norms by trimming its stake in PSBs to 52 per cent in a phased manner. PSBs could potentially raise up to Rs 1,60,825 crore. The govt also spoke of getting Rs 89,000 crore through the stake sale. Getting big money seems to be a tall order. Analysts say valuations of PSBs are currently at a huge discount to their private sector peers. Notwithstanding this year's over-30 per cent rally, some PSBs continue to trade below their book value. Of 24 listed PSBs, 21 stocks are trading at discount to book value. The subdued valuations, analysts, say are due to NPA worries. Most PSBs are plagued by high bad assets, which could worsen if global commodity prices continue to soften
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