Shares of Central Bank of India, Indian Overseas Bank hit 20% upper circuit after media reports on divestment

As per a media report, Central Bank of India and IOB have been shortlisted by the centre for divestment.

The share prices of Central Bank of India and Indian Overseas Bank (IOB) marked a 20 per cent upper circuit on the National Stock Exchange (NSE) on the back of heavy volumes amidst media reports that both financial institutions are shortlisted for divestment.

In a report by CNBC Awaaz, Central Bank of India and IOB have been shortlisted by the centre for divestment. In the first phase of divestment, the two lenders might witness a sale of 51 per cent. The report added that the government will be amending the Banking Regulations Act and other banking laws necessary for divestment.

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The plan for privatization was announced in the Union Budget for 2021-22 as a part of the centre’s larger divestment goals for FY22 including plans of privatizing several other non-financial state-run entities and the listing of the wholly-owned Life Insurance Corporation of India (LIC).

Mumbai-based Central Bank of India was trading at ₹24.30, adding Rs 4.05 or 20 per cent. A combined shares of 80.5 million have changed hands and pending buy orders for 2.9 million shares existed on the NSE and BSE.

On NSE, Chennai-based IOB’s shares hit a 52-week high of ₹23.60. It was up by ₹3.90 or 19.80 per cent. Additionally, the counter saw a more than doubled trading volumes with a combined shares of 71 million changing hands on NSE as well as BSE. With no sellers available, pending buy orders for 3.6 million shares existed on both the exchanges.