Tuesday, February 11, 2025

Bank of Maharashtra plans QIP of about ₹2,500 cr in FY26 to meet MPS norms

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Bank of Maharashtra (BoM) will do a Qualified Institutional Placement (QIP) of about ₹2,500 crore in the next financial year (FY26) to adhere to the market regulator’s minimum public shareholding (MPS) norm of 25 per cent. By doing so, the government’s stake in the public sector bank will come down from 79.60 per cent now to 75 per cent.

The Pune-headquartered Bank had raised equity share capital (including share premium) of ₹3,500 crore through QIP on October 5, 2024. Accordingly, government’s shareholding in the bank reduced to 79.60 per cent as on December 31, 2024, from 86.46 per cent earlier.

Nidhu Saxena, MD & CEO, underscored that the bank has already achieved a major milestone in its bid to comply with the MPS norm, with the government’s stake getting diluted in a single tranche of 6.86 per cent to 79.60 per cent after the October 2024 QIP.

He observed that while there is a dispensation available to banks meet the minimum public shareholding norm by August 2026, the bank has its own plans to make this happen much before that timeline. “We have been performing well consistently. So, we will keep our engagement on with the investors at large, conveying to them our future growth plans. We will look at the appropriate mode and the appropriate time and decide in FY26 on some further capital raise…We got a good response to our previous capital raise efforts,” Saxena said.

Gold loans

On gold loans, the BoM chief said the bank expects the portfolio to grow to about ₹15,000 crore by March-end 2025 against ₹13,250 crore now. “We are mindful of the issues around gold loans and the concerns raised by the regulator. We have actually gone back and reviewed our entire systems and processes…We also are looking at some co-lending partnerships. So there are gold loan NBFCs, which are in the market for decades. And they also have robust audit, safekeeping, storage, valuation, etc..So, put together, via co-lending and the loans that are done through our branches, we are looking at growth in this segment,” Saxena said.

Direct Assignment

During the reporting quarter, the bank acquired non-corporate loans (not in default) aggregating ₹2,724 crore through assignment. These loans have a tangible security of 33.10 per cent, per the bank’s notes to accounts. “In fact, when we analyse our growth, some of it does come from bulk, institutional kind of business and pool transactions are included in this. So, in the last two quarters, we have been emphasising with our field functionaries…that the branches under their jurisdiction should be doing their core activities. So, we do not like to have this dependence on the bulk components of business going forward,” the BoM chief said.

Rohit Rishi, Executive Director, observed that the loans that were acquired during the reporting quarter were short-term loans (of around 24 months to 30 months) in the microfinance or MSME segments. “So these loans get churned very quickly and wherever we are able to get good pricing, we go for such transactions…..These loans constituted around 5.5 per cent of the total advances as of December-end and we don’t intend to increase this proportion going forward,” he said.







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