IOB stock hits new 52-week high, Central Bank of India near record-level after privatisation report

In the Union Budget FY22, the government announced the privatisation plan as part of its broader divestment goals for FY22.

Jun 08, 2021 10:06 IST India Infoline News Service

The public policy think tank of the Indian government, Niti Aayog, has recommended two banks namely the Central Bank of India and Indian Overseas Bank (IOB) suitable for the privatisation plan. It is being known that the Centre may sell stakes in these two state-owned banks as part of its privatisation plan that was announced in Union Budget 2021. On Monday, IOB has hit a new fresh all-time high, while Central Bank stock was near its record level.

At around 10.51 am, IOB was trading at Rs22.35 per piece up by 3.7% on Sensex. The stock clocked a new 52-week high of Rs23.45 per piece during the early trade.

Meantime, Central Bank was performing at Rs22.95  per piece flat compared to the previous closing. The stock had touched the day's high of Rs24.45 per piece which was near the record high of Rs26.40 per piece.

According to a Times of India report, the proposal from the government think tank is being vetted by the disinvestment and financial services departments, ministry sources said. The exercise is part of a multi-stage process for finalising entities that are to be taken up for privatisation. Sources also said that the Bank of India (BoI) may be a potential candidate for sale.

On Wednesday, Fitch said that "the Indian government's plan to privatise two state-owned banks in the current financial year (FY22, ending March 2022) could face delays amid renewed challenges for the Indian banking sector."

In the Union Budget FY22, the government announced the privatisation plan as part of its broader divestment goals for FY22 and includes privatisation of several other non-financial state-owned entities as well as a listing of the wholly-owned Life Insurance Corporation of India (LIC), India's largest life insurance company.

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