Nifty PSU Bank Surges Over 2.5% On Govt’s Move To Monetise Subsidiaries Via IPOs

PSU Bank Stocks: Shares of State Bank of India (SBI), Bank of Maharashtra, Canara Bank and other public sector banks (PSBs) surged up to 5 per cent in early trade on June 30, 2025, as the Ministry of Finance directed these banks to explore monetising their investments in subsidiaries and joint ventures by listing them on stock exchanges.

Bank of Maharashtra jumped over 5 per cent, followed by Union Bank of India, which gained up to 4 per cent. Punjab National Bank (PNB), Indian Bank, Canara Bank, Punjab & Sind Bank, Bank of Baroda, UCO Bank, and Indian Overseas Bank advanced between 2 per cent and 3.50 per cent. Bank of India, SBI, and Central Bank of India were also among the gainers.

Nifty PSU Bank Index Extends Gain For 5th Straight Session

The Nifty PSU Bank index, which tracks the performance of 12 PSBs, climbed as much as 2.65 per cent. All constituents of the index were in green, as of 11:30 AM.

Today is the fifth consecutive session of gain for the index, during which it has surged 5.3 per cent. Over the past four months, Nifty PSU Bank index has rallied over 30 per cent, outperforming the benchmark Nifty 50 and Nifty Bank indices. Nifty 50 and Nifty Bank have rallied 15.60 per cent and 18.94 per cent, respectively.

Why FinMin Has Directed PSBs To List Their Subsidiaries

The Ministry of Finance’s direction to PSB is aimed at helping them generate better returns from these holdings through strategic disinvestment over the medium to long term.

According to a PTI report, around 15 subsidiaries or joint ventures of PSBs are being lined up for initial public offerings (IPOs) or divestment in the coming years.

Sources told PTI that banks may be required to invest in scaling up operations of their subsidiaries before moving toward monetisation. The goal is to ensure these entities are well-positioned to deliver strong valuations at the time of listing or sale.

As part of the process, banks have also been advised to improve governance, enhance decision-making, and improve operational efficiency within their subsidiaries, the PTI report said.