The analyst advised caution on these stocks, noting that all four lenders are trading below their 200-DMA.
Shares of four public sector undertaking (PSU) banks — Indian Overseas Bank, Punjab and Sind Bank, UCO Bank, and Central Bank of India — are in focus after an announcement by M Nagaraju, Secretary of the Department of Financial Services (DFS), earlier this week.
He said that these state-run lenders would raise capital this year to comply with the Securities and Exchange Board of India’s (SEBI) minimum public shareholding (MPS) norm.
PSU Banks: Charts Suggest Patience
SEBI-registered analyst Mayank Singh Chandel noted that the government owns between 89% and 95% of these four PSU banks. And since SEBI’s norms say that no promoter should own more than 75%, these banks will raise fresh capital.
What this means for investors is that more shares of these banks will be available for the public, but the government will still keep at least 51% control.
However, the technical charts are flashing weak signals, according to Chandel. All four banks are trading below their 200-day moving average.
Here are the key levels to watch before considering a buy:
Indian Overseas Bank: The stock fell since February 2024 and has been moving sideways since April 2025. Chandel said one can consider buying only if it rises above ₹41.6 with good strength.
UCO Bank: The stock has been making lower highs and lower lows since February 2024 and has not filled the gap from April 1, 2025. He recommended traders to avoid buying until it moves above ₹35.4.
Punjab & Sind Bank: Wait until it goes above ₹43 before considering a buy, said Chandel.
Central Bank of India: The stock fell from February 2024 and is now moving sideways. A safer buy is only recommended after it crosses ₹41.
He concluded that for now, it is wise to stay on the sidelines and wait for clear breakouts before making any new trades in these four PSU banks.
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