Shares of Punjab National Bank Ltd rose nearly 9% on Friday's morning trade as the bank received the government’s nod to divest its entire stake in UTI Asset Management Company (AMC) as part of its noncore asset sale plan to shore up its capital base.
"The bank has received approval of DIPAM, Ministry of Finance, Government of India for divestment of Bank's entire/part stake in UTI Asset Management Company Limited in single or multiple tranches," said the company in an exchange filing on Thursday.
As per brokerage ICICI Direct Research, the bank holds 15.22% stake in UTI AMC worth around 1,300 crore rupees at current valuation.
"We believe this should increase the market cap by approximately 2%. The recent run up in stock price has already been factored in," said the brokerage house.
The public sector bank's stock surpassed its 52-week high from its previous trading session, and gained 96.61% from 52-week low of 28.0. The stock has gained 30.68% in seven trading sessions.
Further, over the six months period the stock has gained 82.01%. The bank's weekly average delivery volume is 27.19%.
The stock price outperformed its sector by 24.12% in the past year.
Analysts believes the stock's outlook to remain positive, and witnesses the stock forming good patterns. They said that further rally till 59 level is possible, with support at 51 level.
On November 1, the Punjab National Bank reported a 62.8% on year fall in its net profit to 411.3 crore rupees for the September quarter. Sequentially, the net profit for the September ended quarter rose 33.3% from 308.4 crore rupees reported in the April-June quarter.
According to Mintgenie poll, 17 analysts recommend ‘sell’ rating for the stock.
