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The Rs 6.76 lakh crore blockbuster rally in PSU bank stocks, which gave 7 multibaggers in last one year, is now staring at a turning point as the Sebi deadline to meet 25% minimum public shareholding (MPS) rule ends this August.Besides improvement in fundamentals such as sharp earnings growth and the turnaround in asset quality, one of the factors behind the bull run is the low free float factor. Out of the 7 PSU banks which have more than doubled investor wealth in the last one year, Punjab National Bank (PNB) meets the 25% criteria while Union Bank Of India became compliant last month following a Rs 3,000 crore QIP.The government now has to cut its stake in all the remaining five multibaggers - Bank Of Maharashtra, Central Bank Of India, UCO Bank, Indian Overseas Bank and Punjab & Sind Bank (PSB). <iframe title="PSU banks: Link between free float and share prices" aria-label="Table" id="datawrapper-chart-8BLqB" src="https://et-infographics.indiatimes.com/graphs/8BLqB/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="506" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();</script>With a government shareholding of 98.25%, PSB has delivered an impressive 126% return over the past year. Similarly, Indian Overseas Bank, with a government shareholding of 96.38%, has witnessed a remarkable 160% return. Among all the 12 PSU banks, IOB is also the most expensive stock as it is valued at a price-to-book value of 4.73.The story is similar for UCO Bank, Central Bank, and Bank of Maharashtra, all having significantly high government shareholdings.A high promoter holding, in this case government holding, can lead to an artificial mismatch between demand and supply as fewer shares are available for the public to buy and sell.Sebi rules, therefore, mandate all listed companies to have a minimum 25% public float but with some exceptions. PSU banks, for example, have been given time till August 2024 to meet the norms."It may opt for Follow-on Public Offers (FPOs), QIPs or offload some stake via ETF routes like the Bharat 22 ETF," Yashovardhan Khemka of Abans Holdings said.A potential increase in free float can, on one hand, create a supply overhang for share prices to march upwards, but on the other hand it can also allow more investors to recognize the strong fundamentals and value potential of these PSU bank stocks."As more shares become available for trading, liquidity increases, and a broader range of investors can access these stocks. This increased accessibility could lead to greater market efficiency and better price discovery, ensuring that the stocks trade closer to their fair value over the long term. Therefore, while low free float may have posed challenges in the past, increasing free float could unlock the full potential of these fundamentally strong stocks and benefit both investors and the companies alike," Shreyansh V.Shah, Research Analyst, StoxBox, said.Also read | PSU bank stocks ride past private sector peers in 2024, but how long will good days last?Beyond the float factorWhile a direct correlation between low free float and high share prices have been seen in many PSUs, the future trajectory of stock prices would also depend on valuations and growth outlook.Since 2019, PSU banks have grown net revenues at a 17.8% CAGR versus private banks 14.9%, despite working from a larger revenue base. A massive and impressive turnaround has been seen in gross NPAs which has dropped from a peak of 14.6% to 3.7% in Q3, shows calculations done by Ambit Global.Banks like Bank of Maharashtra, IOB, and UCO Bank have witnessed marked improvements in their GNPA levels over time, mainly due to declining slippages and improving recoveries.Analysts say the significant discount relative to book value on a forward basis makes these banks more attractive to investors seeking value opportunities in the market."We believe that while the PSU rally has been sharp and the sector has seen significant re-rating, the stock valuations still look reasonable in context to business growth and profitability. PSU banks are well positioned to pursue healthy growth (given ample balance sheet liquidity) and maintain resilient margins as they benefit from residual MCLR repricing. The decline in bond-yields, along with continued improvement in credit cost (barring SBI), will support healthy profitability," Motilal Oswal's Nitin Aggarwal said.(Data: Ritesh Presswala)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Equity indices declined over half a percent on Friday amid weak global market trends. The 30-share Sensex declined 453 points to settle at 72,643 and the Nifty dropped 123 points at 22,023.Stocks that were in focus included names like OIL, which fell 4.04%, IOC, which declined 5.25%, and BPCL, whose shares dropped 4.15% on Friday.Here's what Pravesh Gour, Senior Technical Analyst at Swastika Investmart, recommends investors should do with these stocks when the market resumes trading today.OILIn the longer time frame, it has given a long consolidation (multiyear breakout) above Rs 350, and after that, it has shown a massive rally till Rs 647, but in the last few trading sessions, the counter has shown profit booking.However, it rebounded precisely from the 50-day exponential moving average and managed to close above the neckline.Currently, it's fluctuating between the moving averages, with 510 levels serving as crucial support; below this, 440 will be the next important support. Looking at the upside potential, the first resistance zone lies around 600, where 20 DMA is placed. If it surpasses 600, we may anticipate levels of 700 in the short term.IOCThe stock has experienced a significant breakout over multiple years with substantial trading volume. After reaching higher levels, there has been some profit-taking, leading to a retest of its last breakout level around Rs 150.The overall structure suggests potential for long-term investors, particularly as it's trading above key moving averages on the weekly chart.Looking ahead, Rs 200 poses as the immediate resistance, with potential for further upward movement towards Rs 240 and beyond once breached. On the downside, Rs 150 serves as a support level, with a robust demand zone around Rs 125 in case of any corrections.BPCLThe counter has witnessed a multi-year breakout over a longer timeframe with huge volume. From the higher levels, it has shown some profit booking and retested its last breakout level at around Rs 550, while on the daily chart, it has taken a support of 50-DMA and bounced back.The structure of the counter looks lucrative for long-term investors, as it is trading above all its important moving averages on the weekly chart.MACD (moving average convergence divergence) is supporting the current strength, whereas the momentum indicators are also positively poised.On the long-term view, Rs 700 is the immediate hurdle on the upside; above this, we can expect a move towards Rs 800+. On the downside, Rs 550 will be the support level, while below this, Rs 470 is a strong demand zone during any correction.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Most technical charts indicate a weak trend for Nifty in the short term. A decisive move below 21,900 could trigger significant weakness, potentially for the next support levels of 21,500-21,400, as suggested by technical analysts. Stocks recommended by them include BEL, JK Cement, ITC, AU Bank, and Kotak Bank, while those with a negative bias include Tata Motors, M&M, IOC, Hind Petro, SAIL, Tata Steel, PFC, Biocon, and DLF.NAGARAJ SHETTI SENIOR TECHNICAL ANALYST, HDFC SECURITIESWhere is the Nifty headed this week? A negative candle was formed on the daily chart, which was placed at the edge of moving below the immediate support of 21,900. The downside breakout of the daily 10/20 period exponential moving average (EMA) and ascending trend line is intact, and the market is finding resistance around 22,200 levels. Nifty, on the weekly chart, formed a long negative candle, which indicates the formation of a bearish engulfing-type pattern. Nifty, on the weekly chart, placed at the edge of moving below the strong support of the 20-week EMA, around 21,915. This is not a good sign. The near-term trend of Nifty is weak. A decisive move below 21,900 could open sharp weakness down for the next support of 21,500-21,400 levels. What should investors do? One may look to book profit from long trading positions and also start creating fresh short positions in Nifty and stocks. At lows, one may find an opportunity to book a profit of shorts around 21,500-21,400. One may place a stop loss for trading short positions around 22,250-22,300. Stocks with negative bias include Tata Motors, M&M, Indian Oil, HPCL, SAIL, Tata Steel, PFC, Biocon and DLF. 108571735SHILPA ROUT AVP - TECHNICAL RESEARCH, PRABHUDAS LILLADHERWhere is the Nifty headed this week? Nifty option chain suggests good support zones around 21,750 which should act as a strong support base going ahead. But on every decline with this support, we should see 21,500 being claimed again and 21,800 eventually once before the pre-election rally. The option chain suggests PE writers being aggressive at 21,800/20,000 strikes on a weekly and monthly basis, with 22,500/23,000 call writers also adding very strong positions. Overall put call ratio, also being neutral, adds a hint to the trend reversal again for the bull run to continue the coming week. What should investors do? Last week, Nifty held the level of 21,900 and was trading in the range of the 21,900-22,200 zone, with strong resistance at 22,200 - 22,300 levels. Closes above 22,300 levels will confirm the positive bias. Until then, we are in the range of 400 points as of now, and trading in a rangebound market. A decisive breach of 50-DMA will further trigger another breakdown towards the 21,500 level. Buy BEL for a target of Rs 210 with support at Rs 180 levels. Buy JK Cement for a target of Rs 4,500 with a stop loss of Rs 4,000. Buy India Cements for a target of Rs 230 with a stop loss of Rs 198. Buy Balrampur Chini for a target of Rs 380 with a stop loss of Rs 350. APURVA SHETH HEAD OF MARKET RESEARCH, SAMCO SECURITIESWhere is the Nifty headed this week? Nifty has formed a bearish engulfing candle on weekly charts. It has also breached the rising trendline drawn from October ’23 lows. The weekly RSI is also trending lower after forming a bearish divergence. All of these suggest bears are likely to remain in control. Bulls have some hopes if they are able to sustain above 21,900 levels. For the upward momentum to sustain, they must pull the Nifty above 22,200. What should investors do? Markets are at a crucial juncture right now. Overall, the breadth has weakened exceptionally and is in oversold territory. Thus, a bounce-back could be due in mid-cap and small-cap stocks. However, only fundamentally strong stocks might be able to recover. So, investors must not expect a broad-based rally any time soon. Stocks from sectors like FMCG, pharma and IT too could give you some protection. Traders can look for long-term opportunities in ITC, AU Bank and Kotak Bank in the coming week.

Mumbai: The decision by India's capital markets watchdog to exempt foreign portfolio investors (FPI) from additional disclosure requirements will ease their compliance burden where majority assets held by them are based in the country. The Securities and Exchange Board of India (Sebi) has exempted overseas funds, having more than 50% of their India equity assets under management in a single corporate group, in case the concentrated holdings of the funds are in a listed company with no identified promoter. "It will ease out compliance burdens in situations where majority assets held by FPI are based in India," said Tejveer Singh, senior advisor, PSL Advocates and SolicitorsSebi said FPIs would qualify for the exemption if they met two conditions.First, these FPI holds not more than 50% of India equity assets under management in the corporate group, after excluding its holding in the parent company with no identified promoter. Second, the composite holdings of all such FPIs, which hold more than the 50% concentration criteria and are not exempted, are less than 3% of their total equity share capital. Some securities lawyers said the relaxation could have been wider. "Ideally, the exemption should have been extended to several other categories of FPIs. For instance, FPIs owned by private equity (PE) funds, especially those managed by large listed PE firms, should have been part of this," said Pulkit Sukhramani, partner in securities laws litigation team at JSA. "FPIs holding shares in companies without promoters should be exempted regardless of the 3% threshold or corporate group requirements.""The framework on granular disclosures could have been thought through better. A number of FPIs are known to have approached Sebi for specific exemptions. The relaxation proposed is unlikely to address practical challenges which several FPIs are facing," Sukhramani said. Sebi has also relaxed the timelines for disclosure of material changes by FPIs. "FPIs were required to disclose material changes within 7 days which will now be 30 days in many cases and for others wherein it's still 7 days in such cases also additional documents could be provided in 30 days which will give them sufficient time as earlier 7 days was too narrow a window," Singh of PSL Advocates and Solicitors said.

The past quarter century has been seminal for India, which has been transformed from “an economy with promise” to being on the cusp of becoming the third largest one after the US and China, Satyan Gajwani, vice chairman, Times Internet, said in his welcome address at the ET Awards for Corporate Excellence 2023.“Today, we mark 25 years since the founding of the ET Awards,” he said. “Way back in 1998, when we launched this endeavour to celebrate the best of Indian business, the Sensex hovered around 4,000 points — it has grown 18 times and is about to touch 75,000.”Gajwani spoke about the remarkable growth of India’s stock markets, showcasing a news report from ET in 1998 quoting a survey result of 3,000 households that preferred selling their stocks rather than buying them.108569361“Look at how far we’ve come. Today, public markets are seeing record participation across all income levels, and retail investors are becoming savvier and more discerning. And even in our private markets, equity as a form of compensation is trusted, valued, and in many cases expected for our most competitive job opportunities,” he said. “I’m quite sure that if we went back 25 years, and had the AI simulation engines we have today, it could not have predicted what India has become... The confident, bold, ambitious, and unafraid nation that is becoming a leading global force.”Gajwani highlighted India’s burgeoning startup ecosystem, which has persuaded talent to stay in the country. “And most of all, the best and brightest of India no longer feel compelled to look beyond our borders for professional growth, seeing the potential to make a real impact here at home.”