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PNB deemed bankable despite volatility
February 18, 2003 15:57 IST
Punjab National Bank was the subject of some deal of volatility, but still made headway as some brokerages seem to be turning bullish here.
The scrip of the big nationalised bank climbed 3% to Rs 84.05 on BSE in mid-afternoon trades on Tuesday. But volatility marked the counter, as in the previous few trading sessions. Around 710,000 Punjab National Bank shares changed hands on BSE on Tuesday.
The scrip had rallied 107% to a life-time closing high of Rs 84.70 on 21 January 2003 from Rs 40.90 on 21 November 2002 . But ever since (21 January), the scrip has seen much see-sawing. Daily volumes on the counter have varied widely as well. The scrip had received a veritable boost since November 2002 with the passage of the Securitisation Bill in Parliament on 22 November 2002. The bill paves the way for recovery of sticky loans of banks.
Domestic brokerage Motilal Oswal Securities has turned bullish on the stock.
PNB is among the top three public sector banks in India with a share of 5.8% in deposits and 5% in advances. It has the second biggest network of branches of 3,857 after State Bank of India. PNB's operations are concentrated in North and Central India.
PNB has been rapidly expanding its retail portfolio.
PNB posted a 133% jump in Q3 ended 31 December 2002 net profit to Rs 189.25 crore (Rs 1.89 billion) on a 25% growth in net interest income to Rs 733.60 crore (Rs 7.33 billion). With 2,535 computerised branches, nearly 81% of the banks business has been captured. It has installed 172 ATMs.
At the close of March 2002, the bank came out with an initial public offer of 5,30,60,700 equity shares of Rs 10 each at a premium of Rs 21 per share aggregating Rs 164.49 crore (Rs 1.64 billion) through the fixed price route. The issue was oversubscribed 4.23 times. The paid-up capital after the issue stood at Rs 265.30 crore (Rs 2.65 billion). Subsequently, the government's holding in the bank stood reduced from 100% to 80%. Following the IPO, capital adequacy ratio of the bank increased to 12.2% at the end of September 2002, well above the minimum prescribed ratio of 9% by RBI.
Analaysts are generally optimistic over the future of public sector banks following the Securitisation Bill. Banks have already started serving notices to defaulters and in some cases have even seized assets. More Hot Pursuits
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