Business

PNB Gets Nod To Divest UTI Stake

Punjab National Bank (PNB) has received government approval from the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, Government of India, to divest its entire stake in UTI Asset Management Company as part of its non-core asset sale plan.

The bank holds a 15.22% stake in UTI AMC worth around Rs 1,329 crore. In the past month, PNB’s stock has appreciated by 27%, compared to a 4.6% rise in the S&P BSE Sensex.

The stock has traded at its highest level since February 2020. Punjab National Bank shares surged 8% to hit a 21-month high of Rs 54.90 per share in Friday’s intraday trade after receiving the government’s nod to divest a stake in UTI AMC.

The bank’s net interest income grew by 30.2% to ₹8,271 crore in the quarter under review from ₹6,352.8 crore a year ago. UTI AMC is the investment manager for the schemes of UTI Mutual Fund, manages offshore funds, and provides support to the Specified Undertaking of the Unit Trust of India.

PNB is one of the sponsors of India’s oldest mutual fund company, along with the State Bank of India, the Life Insurance Corporation of India, the Bank of Baroda, and US-based T Rowe Price.

CARE Ratings reaffirmed the ratings assigned to PNB’s debt instruments, citing the majority ownership and expecting continued support from the Government of India as its largest shareholder. PNB’s increased systemic importance and position in the Indian banking sector are also considered.

Spriha Rai

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