Banking stocks have been taking a severe beating since the beginning of the year and this is after a huge run-up seen in the previous year. While the BSE Sensex has decreased by 6.2% to 14,483.83 on September 5, 2008 from 15,446.15 on September 5, 2007, BSE Bankex lost by 10.6% to 7172.85 from 8018.42.
However, though the market sentiment was not in favour of banks, these were some PSBs who were in great demand from investors. And this has contributed to the governments wealth growing by nearly Rs 1,013 crore in its holdings in the 21 listed PSBs, all in a space of twelve months.
At current market prices (as on September 5, 2008) of the shares of these PSBs, the Government holding is worth about Rs 1,25,928 crore.But as on September 5, 2007,they were worth Rs 1,24,915 crore.
PSB giant SBI has recorded the largest increase in wealth, with the government's stake in the bank now now worth Rs 9,088 crore more than it did at the beginning of the study period. From a price of Rs 1,533.13 in September 5, 2007, the share is currently worth Rs 1,518.55. Another PSB, Bank of India , saw that the government gain an extra Rs 1,449 crore during this period.
Though the share price rise has been spectacular in some other cases, they have not translated into larger wealth for the Government given the inherently small size of these banks. Thus, banks such as Union Bank has seen its price rise by over Rs 7.75 in terms of absolute share price, but that added only another Rs 217 crore in wealth. An increase of Rs 16.85 in share price in the case of Punjab National Bank has translated in to Rs 307 crore in incremental wealth.
Conversely, some of the biggest falls in market capitalisation were noticed in the case of Bank Of Maharashtra (-33.8%), IDBI Bank
(-33.7%),Vijaya Bank (-32.6%) and Andhra Bank (-31.7%). Not surprisingly, UCO Bank has topped the charts, with a gain of over 20.8% in the last twelve months.