Fund infusions in PSBs fail to lift stocks; experts say stick to SBI, BoB

The Nifty PSU Bank index is flat since the government announced a Rs 2.11-trillion recapitalisation plan in October 2017

Despite the government infusing a whopping Rs 1.9 trillion towards the recapitalisation of public-sector banks (PSBs) between October 2017 and February 2019, a 4x increase over the amount infused during FY15 to FY17, the move has failed to enthuse investors. The Nifty PSU Bank index is almost at the same level as on the day of the announcement of recapitalisation.

In fact, barring State Bank of India (SBI), stocks of all PSBs, which benefitted from recapitalisation, are down by 16-57 per cent during this period. Even in absolute terms, the combined market capitalisation of the 20 PSBs is up just