Steel Authority of India (SAIL) and Bharat Heavy Electricals (BHEL) were up more than 10% each in intra-day trade, while, Engineers India, NLC India, IFCI, Union Bank of India, NMDC, IDBI Bank, Corporation Bank and Punjab National Bank (PNB) from the index up in the range of 5% to 8% on the BSE.
In an attempt to support credit growth and fuel job creation, the government on Tuesday decided to take a massive step to capitalise public-sector banks (PSBs,) in a front-loaded manner. The government has announced a large re-capitalisation programme of Rs 2.1-lakh-crore for state-owned banks.
“This would help remove the binding constraint faced by state-owned banks in resolving the bad loan problem and meet the new capital adequacy norms by FY19. The proposed move will likely help re-rate state-owned banks from their depressed valuations,” analysts at IIFL Institutional Equities said in note.
The government also reinforced its commitment to providing the country with more efficient transportation by launching a mega road building programme of Rs 6.92-lakh-crore.
The latest announcement provides a positive push to the infrastructure segment in the economy. The government will have to draw a definitive road-map for the timely completion, fund mobilization as well as streamlining of bottlenecks like land acquisition for the programme to be beneficial, according to the rating agency CARE Ratings.