Billionaire investor Rakesh Jhunjhunwala has bought the shares of the state-owned Canara Bank, the shareholding pattern of the lender for the September quarter shows on the Bombay Stock Exchange (BSE) website.
The filing shows Jhunjhunwala bought a 1.6 per cent stake or 2,90,97,400 shares of the bank. This is a fresh investment by Jhunjhunwala, whose name was not there in the list of big shareholders in the previous shareholders' data.
Canara Bank had recently raised Rs 2,500 crore in fresh capital in qualified institutions placement (QIP) from institutional investors in order to improve its capital ratio. The QIP opened on August 17 and closed on August 23, 2021.
Like many other big investors, Jhunjhunwala is also bullish on state-owned banks. Earlier in March, he had said that PSU bank stocks were "hopelessly undervalued", reported The Economic Times. Just like Jhunjhunwala, ace investor and market guru Madhusudhan Kela also said he's bullish on India's public sector banks (PSBs), which have seen a wave of consolidation in the recent past.
Canara Bank's 52-week range stands at Rs 84.35-183.40. Its P/E ratio is 7.58. The bank's market cap has risen to Rs 31,593 crore.
According to MarketsMojo, the bank has declared positive results for the last five consecutive quarters. The stock is trading at a discount compared to its average historical valuations and with ROA (return on asset) of 0.3, it has a 'Very Attractive' valuation with a 0.4 Price to Book Value.
Canara Bank's standalone net profit jumped nearly three times to Rs 1,177.47 crore for the June quarter, thanks to a reduction in NPAs (non-performing assets). Canara Bank's gross NPAs dipped to 8.50 per cent of the gross advances in Q1, while the net NPA ratio also fell to 3.46 per cent on a year-on-year basis.
Meanwhile, Canara Bank's share is trading at Rs 174.65, up 0.11 per cent or Rs 0.25, against the previous close of Rs 174.45 on the NSE.
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