Synopsis:
SBI trims stake in Tamil Nadu Telecommunications, offloading 2.02% amid the company’s sharp 157% stock surge in one month.
This major financial institution, renowned for its extensive banking and investment services, is strategically adjusting its investment portfolio. In its recent move to divest a portion of its holdings, it sold a 2.02% stake in a telecommunications company. Let’s dive into the details.
State Bank of India‘s stock, with a market capitalisation of Rs. 7,24,277 crores, rose to Rs. 815.50, hitting the intraday high of up to 0.84 percent from its previous closing price of Rs. 808.65. However, the stock over the past year has given a negative return of 7.9 percent.
Stake Sale
The State Bank of India (SBI) has disclosed that it has sold a portion of its shareholding in Tamilnadu Telecommunications Limited in compliance with SEBI regulations. Before the sale, SBI held 42,47,500 shares, which represented a 9.30% stake in the company. The shares were sold through open market transactions.
After the sale, SBI’s shareholding reduced to 33,23,774 shares, or 7.28% of the company’s total voting capital. The transaction did not involve any pledged, encumbered, or convertible securities.
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Target Company Stock Returns
Tamil Nadu Telecommunications Limited, a company making optical fibre cables since 1988, has delivered impressive stock returns. In just the past month, its share price has surged by over 155%. Looking at the long-term performance, the stock has gained a massive 1,356% over five years. It is currently trading at Rs. 25.48.
Financial Highlight
The bank reported a 4.43 percent year-on-year growth in Net Interest Income, rising from Rs. 1,59,876 crore in FY24 to Rs. 1,66,965 crore in FY25. However, margins narrowed slightly, with the Net Interest Margin (NIM) for the whole bank declining by 19 bps to 3.09 percent. Despite this, operating profit saw a strong increase of 17.89 percent, reaching Rs. 1,10,579 crore in FY25. Net profit also registered solid growth, rising 16.08 percent YoY to Rs. 70,901 crore.
On the asset quality front, the bank showed marked improvement. Gross NPA dropped from 2.24 percent to 1.82 percent, and Net NPA reduced from 0.57 percent to 0.47 percent, indicating better credit risk management. Provision Coverage Ratio (PCR incl. AUCA) improved to 92.08 percent, while capital adequacy fell modestly to 14.25 percent. Gross advances grew 12.03 percent YoY to Rs. 42.20 lakh crore, and total deposits increased by 9.48 percent, reaching Rs. 53.82 lakh crore, reflecting healthy business expansion.
Written By Fazal Ul Vahab C H
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