Recapitalisation news brings cheer! Central Bank of India, Indian Overseas Bank, Bank of India and UCO Bank shares surge in today's trade

As government has decided to carry out a capital infusion drive in four public sector banks of as much as Rs 14,500 crore, Nifty PSU Bank Index zoomed by over 2.5 per cent to become second highest performer during today's session. The four lenders in which government will infuse capital by issuing non-interest-bearing bonds include Central Bank of India, Indian Overseas Bank, Bank of India and UCO Bank.

Amidst this news, Indian Overseas Bank spurted over 5.5 per cent in today's trade, followed by Central Bank of India that soared nearly 5 per cent. UCO Bank and Bank of India surged by over 4 and 3 per cent respectively.

Out of 13 scrips, 11 advanced over 2 per cent in today's trade. Heavyweight such as State Bank of India and Bank of Baroda in PSU Bank Index surged the least.

The capital infusion created buying sentiment, as PSU Bank Index also contributed most towards benchmarks indices growth as Sensex reclaimed 50000-mark, whereas Nifty 50 crossed over 14800-level before closing for a week.

Non-interest-bearing bonds or zero-coupon bonds are issued at a discount from their par value and does not involve interest payment on the holder's side.

The Finance Ministry on Wednesday, in its gazette notification, said, "The special securities will be issued at par for the amount as per the application made by the eligible banks."

The government will infuse Rs 4,800 crore in Central Bank of India, Rs 4,100 crore in Indian Overseas Bank, Rs 3,000 crore in Bank of India and Rs 2,600 crore in UCO Bank.

(Authored by Vaibhav Bansode)