According to a report from The Economic Times (ET), the Indian government is considering allowing four state-owned banks to access the capital market to raise funds during the fiscal year 2025.
Among the banks earmarked for potential stake sales are Punjab National Bank (PNB) and Central Bank of India (CBI). The objective behind such measures is to augment their lending activities and enhance public participation in these financial institutions, as per sources cited by ET.
PNB aims to initiate a follow-on public offer (FPO) by September, while CBI is looking to secure approval for an offer for sale (OFS) to expand its public shareholding. Currently, the Indian government holds a majority stake of 93.08 percent in CBI.
As per the ET report, PNB’s board has greenlit a proposal to raise Rs75 billion in equity capital during FY25 through either an FPO or Qualified Institutional Placement (QIP). Similarly, Punjab & Sind Bank, another state-owned bank, intends to mobilize Rs2.50 billion via the QIP route in the upcoming financial year.
India presently has 12 public sector banks (PSBs), including heavyweights like State Bank of India (SBI), PNB, Bank of Baroda, and CBI. Notably, the government holds ownership exceeding 80 percent in six of these state-run banks.