Shares of Indian Overseas Bank ended 15 percent higher on Monday, marking its best single-day gain in 14 years. At the day's high, the stock was locked in an upper circuit of 20 percent.

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The last instance of the stock gaining 20 percent in a single day was back in May 2009. The move is in line with a broader PSU Bank rally. The overall market capitalisation of the PSU Bank index crossed Rs 12 lakh crore in Monday's session.

For the June-September quarter, the stock has nearly doubled. It is the best performer on the PSU Bank Index starting June 30.

This 94 percent surge that the Indian Overseas Bank stock has seen is the best since it listed 22 years ago in early 2001.

However, one must note that Indian Overseas Bank has the one of the lowest float among the PSU Banks that is available for trading. As of the June quarter, the government still held 96.38 percent stake in the company.

The excess 21.38 percent stake held by the government above the minimum shareholding pattern norms is now valued at Rs 17,586 crore. You can read about the excess government stake held in various state-run companies here.

Today's volumes on Indian Overseas Bank were over 700 percent higher than its 20-day average. Over 30 crore shares of the bank were traded during Monday's trading session compared to Tuesday's 15 crore shares.

A large deal also took place in the stock today where over 6 crore shares or 0.35 percent of the lender's equity worth Rs 280 crore exchanged hands. Buyers and sellers in the transaction are not immediately known.

Indian Overseas Bank's market capitalisation also crossed that of Punjab National Bank in today's session. For the most recent June quarter, the lender had a gross NPA of 7.1 percent, compared to gross NPA of over 13 percent in June 2020.

"I would go out and look for some opportunities within this space either through the larger name like State Bank of India (SBI) or some of the smaller banks be it Canara Bank, Union Bank of India, Bank of Baroda (BOB). This is one pocket which gives a lot of comfort at this point," Hemang Jani, Market Expert said.

(With Inputs From Abhishek Kothari)

First Published:Sept 18, 2023 3:46 PM IST