Canara Bank, a state-owned lender, extended its winning streak for the fourth straight session on Wednesday, September 24, with shares gaining another 2.2% to hit a fresh 52-week high of ₹124.55 apiece, even as overall market sentiment remained subdued.
Today’s intraday high also marks the highest the stock has touched since June 2024. After remaining under pressure for three consecutive months, Canara Bank share price staged a strong comeback in September, surging nearly 19%. This is also its biggest monthly gain in the last three years, with the previous best being a 27% jump in October 2022.
The rally in Canara Bank share price has also pushed its year-to-date gains to 23%. If the current momentum is sustained through the rest of the year, it will mark the stock’s fifth consecutive year of positive returns.
What is boosting Canara Bank share price to higher levels?
The turnaround in sentiment is supported by several positive developments, including reports of a possible increase in the FPI limit for PSU banks and hopes of a pickup in credit demand. These factors have helped Canara Bank share price emerge as the best performer in the recent rally among public sector bank stocks.
Recent media reports indicate that the government is considering raising the foreign investment limit (FII) in public sector banks, a move that could potentially unlock substantial passive inflows.
The proposal aims to increase the foreign portfolio investor (FPI) cap from the current 20% to as high as 49%, while ensuring the government maintains a majority stake of over 51%. Such a move is expected to attract significant capital into the banking sector, particularly benefiting PSU banks that are part of major global indices, The Economic Times reported.
According to a note by Nuvama Alternative and Quantitative Research, as many as six PSU banks, including Canara Bank, could together witness passive inflows of more than $900 million if the proposal to raise the FII shareholding limit is implemented.
For Canara Bank specifically, where foreign shareholding currently stands at 11%, the brokerage estimates potential passive inflows of around $64 million.
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