PSU Bank Stock: The Central Bank of India stock has been on a sharp decline, hitting an 18-month low of ₹36.86 per share on April 2, 2025. The stock crashed 11% in a single day extending its three-day fall to 16%. Over the past eight months, it has lost 33% of its value, making it a cause for concern among investors. The stock is currently trading 52% lower than its February 2024 peak of ₹77.
One of the main reasons behind the decline is the bank’s recent issuance of shares through the Qualified Institutional Placement (QIP) route. The Central Bank of India along with three other PSU banks—Punjab and Sind Bank, UCO Bank and Indian Overseas Bank—undertook this fundraising exercise to comply with the Minimum Public Shareholding (MPS) norms.
The government holds an 89.3% stake in the bank, while Life Insurance Corporation of India (LIC) owns an additional 3.16%. Other major investors include SBI Life Insurance, ICICI Prudential Life Insurance and IIFL Finance. Despite the QIP fundraising market sentiment towards PSU bank stocks remains weak.
According to analysts, PSU banks are expected to report modest earnings growth of 4.5% year-on-year for Q4FY25. However net interest margins (NIMs) are likely to remain under pressure. The brokerage firm Motilal Oswal projects a 9% compound annual growth rate (CAGR) in aggregate earnings for PSU banks over FY25-27.
Despite the sharp fall, Central Bank of India posted a strong Q3 FY25 performance, with a net profit increase of 33.58% year-on-year to ₹958.93 crore. Its total income also grew by 6.56% reaching ₹9,738.64 crore. Analysts believe that if the bank maintains stability in asset quality and controls credit costs, its stock may recover over time.
For existing investors, experts suggest closely monitoring financial performance and regulatory developments. While the stock has fallen significantly, long-term investors should evaluate whether the current price offers a good entry point. However given the volatility in the PSU banking sector, short-term traders should be cautious.
The information provided in this article is for educational and informational purposes only. It does not constitute financial advice. Investors are advised to conduct their own research or consult a certified financial expert before making investment decisions.
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