Shares of a large-cap banking stock escalated 15.4 percent to reach an intraday high of ₹ 31.10 apiece on the bourses after CARE Ratings assigned a credit rating to its Certificates of Deposits. At 11:56 AM, its shares were trading 12.06 percent higher at ₹ 30.20 apiece.
Indian Overseas Bank informed the exchanges that CARE Ratings vide its rating action dated August 10, 2023, has assigned a fresh rating of CARE A1 + (A One Plus) to Bonk’s proposed Certificate of Deposits of ₹ 10.000 crore. Moreover, they have reaffirmed their rating of non-convertible securities.
The public sector bank was one of the fourteen major banks that were nationalized in 1969. Indian Overseas Bank’s business segments include treasury, corporate/wholesale banking, retail banking and other banking operations. It has a presence in India as well as in Singapore, Colombo, Hong Kong and Bangkok.
The bank’s share price has been on a roll. It gained 72 percent in the past year and 96.42 percent in the past five years, and is therefore on the verge of becoming a multibagger.
With a market capitalization of ₹ 50,942 crores, Indian Overseas Bank is a large-cap company. It has a high return on equity of 8.86 percent and an ideal debt-to-equity ratio of 0.70. Its shares were trading at a price-to-earnings ratio (P/E) of 23.13, which is higher than the industry P/E of 9.38, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 96.38 percent stake in it, followed by retail investors with 2.20 percent, domestic institutions with 1.25 percent, foreign institutions with 0.096 percent and mutual funds with 0.08 percent.
Written by Simran Bafna
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