Bank of Maharashtra take over - Poonawalla and Bajaj seen too keen

3 days back, we have stated possibilities of Bank of Maharashtra getting privatised in FY 2022. In 4 days stock rose by 65% and still seen in UC. Now this bullish view is building on the speculation that Poonawalla through Magma Fin Corp or Bajaj through Bajaj Finace are seen keen to acquire Bank of Maharashtra, at any cost, to enable them to show exponential growth over the next 3-5 years.

Magma Fin had a Net Worth of Rs. 2,830 cr, as at 30-9-20, rising to Rs. 6,400 cr, post allotment of shares to Poonawalla, new promoter of the company. Magma has 297 branches with good presence in Maharashtra, M.P. Rajasthan and U.P. Present M Cap of Magma is at Rs. 9,700 cr, which new promoter would like to take it to new highs, may be Rs. 50k cr, in next 12 -15 months. AUM of the company as at 31-12-20 is at Rs. 15,000 cr. Poonawalla are now the darling of finacial markets of entire world, as also, of Indian Govt, due to Serum, a group company, having proved its ability by supplying Covid vaccine. This will give an extra advantage to Poonawalla.  

Conversely, Bajaj Finace had Net Worth of Rs. 35,500 cr, as at 31-12-20, with AUM of Rs. 1,44,000 cr, of which, Rs. 47,000 cr is in low yielding Mortgage Business and Rs. 23,000 cr is in B2B lending. Bajaj is struggling to raise cheap capital, while is unable to ramp up AUM in last 12 months.

Equity of Bank of Maharashtra is at Rs.6,560 cr, with FV of Rs. 10, with Net Worth of Rs. 10,706 cr, Bank has Deposits of Rs. 1,61,971 cr (of which, Rs. 82,452 is CASA Deposit) with cost of Deposit at 4.09% as at 31-12-20. Adavances are at Rs.1,04,904 cr, and Investments of Rs. 64,638 cr., having 1,874 Branches, with 150 lakh customers and 13,000 employees only, seen lowest in any PSU Bank, being the largest bank in Maharahtra.

So, will be giving an advantage of adding 1 plus 1 to 11, if promoter is capable and reputed. This is seen existing with both, but financial growth matrix are loaded more in favour of Poonawalla from here, which market may start factoring in, sooner or later. So, hold Bank of Maharashtra shares, those who are having it.