Institutional Investors Betting On UCO Bank, Punjab & Sind Bank, SBFC Finance Amid Low Stock Prices: SEBI RA Equitymaster Research

Five penny stocks attracted significant institutional interest in March, with both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) increasing their stakes, suggesting substantial growth opportunities despite their low prices, according to Equitymaster Research.

1. UCO Bank: A public sector bank with a presence of 3,000 branches. DIIs increased their holding from 1.33% to 5.36%, and FIIs expanded their shareholding by 0.42%. 

   According to Equitymaster analysts, UCO Bank's strategic emphasis on low-cost deposits and agricultural loans represents key growth drivers. The bank will succeed only if it achieves competent management and execution within the highly competitive public sector banking environment.

   UCO Bank shares have declined 30% so far in 2025.

2. Punjab & Sind Bank: Reduced its net non-performing assets (NPAs) by Rs 3,500 crores while institutional investors expanded their holdings, with DIIs increasing their stake to 4.32% and FIIs raising theirs by 0.7%. 

   Equitymaster analysts believe that the bank's digital initiatives, including UPI Lite and Central Bank Digital Currency (CBDC), present opportunities for growth. Despite recent advancements, the bank continues to compete with private sector lenders and needs ongoing progress to sustain its competitive edge.

   Punjab & Sind Bank shares have fallen 41.1% so far in 2025.

3. Central Bank of India: With its network of over 4,500 branches, witnessed increased institutional interest across its operations. DIIs increased their shareholding from 2.82% to 5.87%, while FIIs grew their stake by 0.9%. 

   Equitymaster analysts state that the bank's projected growth rate between 10-12% for FY26, combined with the introduction of its super app with over 200 services, sets the foundation for future expansion. The rapidly changing digital banking sector poses operational scaling challenges, according to analysts.

   Central Bank of India shares have fallen 33% so far in 2025.

4. Ujjivan Small Finance Bank: After completing its reverse merger to establish itself as India's third-largest small finance bank, gained significant institutional investment, with DIIs raising their ownership to 8.47% and FIIs expanding their stake by 1.64%. 

   The bank's growth potential, according to Equitymaster analysts, depends on its commitment to secure lending and digital advancements. The bank needs to grow its market footprint while managing competitive challenges in the small finance sector.

   Ujjivan Small Finance Bank shares have risen 23.5% so far in 2025.

5. SBFC Finance: Provides secured lending solutions to MSMEs. Announced its assets under management grew by 28% from last year to Rs 8,700 crores. The company experienced increased institutional attention, as DII ownership reached 17.67% and its disbursements through ICICI Bank partnerships reached 21%. 

   Equitymaster analysts recognized SBFC's potential for growth but warned that market instability and MSME sector risks might affect its future performance.

   SBFC Finance shares have climbed 12.9% so far in 2025.

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