Business
Rekha Jhunjhunwala likely exits Canara Bank after taking home multibagger returns
Jhunjhunwala’s involvement with Canara Bank dates back to August 2021, when Rakesh Jhunjhunwala first picked up a stake in the bank as part of a broader bullish view on public sector banks (PSBs). At the end of the September 2025 quarter, Rekha still held around 1.57% of the bank’s equity, having increased her holding marginally by about 0.1% during that period.
The recent exit comes after the stock delivered strong gains, rallying nearly 60% over the last year, outperforming several peers in the banking pack.
Her late husband, the late ace investor Rakesh Jhunjhunwala, was widely known for his optimistic stance on PSU banks. He believed these lenders were deeply undervalued and poised to benefit from a cyclical recovery in credit growth and improving asset quality.
In past interviews, Jhunjhunwala said he was “extremely bullish on banks and especially on the so-called inefficient banks,” pointing to the strong deposit-gathering ability, improving credit cycles and cheap valuations as key reasons for his confidence in state-run lenders.
The broader PSU banking segment has indeed witnessed renewed interest from investors in 2025, with strong credit growth prospects, valuation support and renewed foreign interest lifting sentiment across state-run lenders.
The upcycle in PSU bank stocks, over the years, has been supported by rising credit demand and improving asset quality metrics, providing a favourable backdrop for shares in the space.In the recent second quarter, Canara Bank delivered a robust profit for the second quarter of FY26, with a strong contribution from non-core income, stable loan and deposit growth and improvements in asset quality.
The bank’s net profit beat analyst estimates, supported by treasury income and recovery from written-off accounts.
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Brokerage Incred expects credit costs to moderate in the medium term and sees the bank well-placed to offset margin compression, while asset quality continues to improve.
The exit marks a noteworthy shift in a position that was once emblematic of the late Rakesh Jhunjhunwala’s bullish view of Indian public banks. With the holdings now below 1%, attention will turn to how Canara Bank’s stock performs in the absence of one of its most prominent investor backers.
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