India’s banking ecosystem comprises 12 public sector banks, 21 private sector banks, and 11 small finance banks. In 2024, the total assets of the public and private banking sectors were recorded at Rs. 161.2 lakh crore and Rs. 109.5 lakh crore, respectively. Public sector banks contributed to around 59.5 percent of the total banking assets, which include public, private, and foreign banks.
Foreign institutional investors (FIIs) have been steadily increasing their holdings in public sector banks (PSU banks) through the September 2025 quarter, reflecting a renewed sense of confidence in state-owned lenders. Shareholding data indicates that FIIs expanded their exposure across almost all major PSU banks, including Bank of Baroda, Canara Bank, and the State Bank of India.
Reports suggest that the Government of India is considering raising the foreign ownership cap in PSU banks from the current 20 percent to 49 percent, a reform that could significantly broaden the sector’s investor base. As per estimates from Nuvama Institutional Equities, this potential policy shift could attract up to $4 billion in passive foreign inflows, providing a meaningful boost to liquidity and market participation within the banking sector.
Following are a few PSU bank stocks that have witnessed a rise in the Foreign Institutional Investors (FIIs) as of September 2025 shareholding pattern:
Punjab National Bank
With a market cap of Rs. 1.41 lakh crores, the stock moved up by around 2 percent on BSE and closed in the green at Rs. 122.45 on Friday. As of the latest shareholding pattern, FII holdings surged from 5.52 percent in June 2025 to 5.67 percent in September 2025, a rise of 0.15 percent.
On the financial front, the bank’s net interest income (NII) declined marginally by around 0.02 percent YoY to Rs. 10,654 crores, while the net profit increased by over 9 percent YoY to Rs. 4,848.6 crores in Q2 FY26.
Union Bank of India
With a market cap of Rs. 1.17 lakh crores, the stock moved up by around 2.2 percent on BSE and closed in the green at Rs. 153.3 on Friday. As of the latest shareholding pattern, FII holdings surged from 7.7 percent in June 2025 to 7.86 percent in September 2025, a rise of 0.16 percent.
On the financial front, the bank’s net interest income (NII) declined by around 2.3 percent YoY to Rs. 8,958 crores, while the net profit decreased by nearly 9 percent YoY to Rs. 4,281.3 crores in Q2 FY26.
Indian Overseas Bank
With a market cap of Rs. 76,198.3 crores, the stock moved up by around 2.2 percent on BSE and closed in the green at Rs. 39.57 on Friday. As of the latest shareholding pattern, FII holdings surged from 0.08 percent in June 2025 to 0.31 percent in September 2025, a rise of 0.23 percent.
On the financial front, the bank’s net interest income (NII) surged by more than 20 percent YoY to Rs. 3,061 crores, while the net profit increased significantly by nearly 57.5 percent YoY to Rs. 1,228 crores in Q2 FY26.
State Bank of India
With a market cap of Rs. 8.82 lakh crores, the stock moved down by around 0.5 percent on BSE and closed in the red at Rs. 955.95 on Friday. As of the latest shareholding pattern, FII holdings surged from 9.33 percent in June 2025 to 9.57 percent in September 2025, a rise of 0.24 percent.
On the financial front, the bank’s net interest income (NII) surged by around 5.5 percent YoY to Rs. 50,038 crores, while the net profit increased by over 6 percent YoY to Rs. 21,504 crores in Q2 FY26.
Bank of Maharashtra
With a market cap of Rs. 45,849.4 crores, the stock moved up by around 4 percent on BSE and closed in the green at Rs. 59.61 on Friday. As of the latest shareholding pattern, FII holdings surged from 1.89 percent in June 2025 to 2.35 percent in September 2025, a rise of 0.46 percent.
On the financial front, the bank’s net interest income (NII) surged by around 16 percent YoY to Rs. 3,248 crores, while the net profit increased significantly by nearly 23 percent YoY to Rs. 1,633.5 crores in Q2 FY26.
Canara Bank
With a market cap of Rs. 1.27 lakh crores, the stock moved up by around 1 percent and closed in the green at Rs. 139.60 on Friday. As of the latest shareholding pattern, FII holdings surged from 11.38 percent in June 2025 to 11.89 percent in September 2025, a rise of 0.51 percent.
On the financial front, the bank’s net interest income (NII) declined marginally by around 1 percent YoY to Rs. 9,659.7 crores, while the net profit increased by nearly 19 percent YoY to Rs. 4,865.8 crores in Q2 FY26.
Bank of Baroda
With a market cap of Rs. 1.49 lakh crores, the stock moved up by around 1 percent on BSE and closed in the green at Rs. 289.1 on Friday. As of the latest shareholding pattern, FII holdings surged from 8.08 percent in June 2025 to 8.71 percent in September 2025, a rise of 0.63 percent.
On the financial front, the bank’s net interest income (NII) surged marginally by around 4 percent YoY to Rs. 13,126 crores, while the net profit decreased by nearly 7 percent YoY to Rs. 5,070.3 crores in Q2 FY26.
Bank of India
With a market cap of Rs. 65,831.6 crores, the stock moved up by around 3 percent on BSE and closed in the green at Rs. 144.6 on Friday. As of the latest shareholding pattern, FII holdings surged from 3.53 percent in June 2025 to 4.24 percent in September 2025, a rise of 0.71 percent.
On the financial front, the bank’s net interest income (NII) declined marginally by around 1.2 percent YoY to Rs. 5,991.6 crores, while the net profit increased slightly by more than 5 percent YoY to Rs. 2,525.6 crores in Q2 FY26.
Written by Shivani Singh
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