Bank of Maharashtra - Seen Ahead In Stake Sale By Govt.

Strategic stake sale by the Govt has started rolling fast, with Air India, likely to see new owner soon.Niti Aayog has recommended startegic salke in Hind Copper & NALCO, which has been our theme as well fro alst 4 months or so. Now this is likely to catch momentum and pace ahead, with IDBI Bank stake sale likely to get finalised in this month. Process will be started in BPCL in this month, of inviting financial bids as well.

However, it is most likely that in coming Winter Session of Parliament, which usually starts in last week of November, to see amendments to be made in Banking Regulation Act, to empower the Govt to go ahead with stake sale in 2 PSB. Looking to cash volume of 1.72 cr shares, on 30-9 and 1-10 in Bank of Maharashtra (BoM), it is most likely to see stake sale happening in BoM.

90.97% stake in BoM as at 17-7-21, after QIP is held by Govt, while 4.62% is held by Institutional investors (with LIC holding 3.07%) and HNIs are holding 1.70%. This leaves 18.22 cr shares, being 2.71% is held by 3.23 lakh shareholders, with each investor, on an average holding 564 share. As stock has not shown any rise (infact fell in last 3 months) about 6,000 retail shareholders exited post 30-6-21, but retail stake rose by 52 lakh shares in last 17 days.

This retail float is of Rs. 370 crore, while 75% of this may not come for selling. So, MF & FIIs seen keen buyer will have a maximum float available of Rs. 92 crore, which is peanut for them.

As NBFC heavy weights are seen willing buyer of BoM, share can move to Rs. 40, by the time bid will be invited and can breach Rs.100, in next 12 months, post stake sale.

Hence, meaningless to watch daily rate of share and advised to hold with full conviction with 12 months view, from hereon.

This is not a Buy or Sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.