Capital raise isn’t a reason to turn optimistic on banking stocks

The Nifty Private Bank index has gained by 15 per cent in three months as against Nifty’s 13.7 per cent gains. An amount of Rs 47,000 crore raised by six banks since May has propped up sentiments.

Indeed, their ability to raise such large amounts in a short span and even rope in quality overseas investors is testimony of their attractiveness in the eyes of large and deep-pocketed investors. But for smaller and retail investors, deployment of this capital should be seen microscopically before turning positive on banking stocks. For one, despite May to August being busy months of …