Bank Of Maharashtra & Punjab & Sind Bank - Expected Privatisation Candidates

By Research Desk
about 2 months ago

We refer to 3 articles carried in this section on 16th, 18th and 19th February, related to caption subject. “The government will sell stake in at least two public sector banks, as part of its privatisation plan in the next financial year” stated by Union Finance Minister Ms. Nirmala Sitharaman in her budget speech on 1st February. So, there will be minimum 2 PSB for privatisation, and can be even 3.

Bank of Maharashtra (BoM) looks certain, as day passes by. Equity of BoM 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 Maharashtra.

Punjab & Sind Bank (PSB) is seen getting prepared on the lines of BoM. Govt will infuse Rs. 5,500 crore, for which EGM has been convened on 25th March 21. Equity of PSB may be at Rs. 4,588 cr, after this fund infusion, with FV of Rs. 10, (assuming issue to Govt at Rs. 12 per share, with present equity at Rs. 701 cr), with Net Worth of Rs.4,734 cr, Bank has Deposits of Rs. 92,487 cr (of which, Rs. 25,572 is CASA Deposit) with cost of Deposit at 4.97% as at 31-12-20. Advances are at Rs. 65,706 cr, and Investments of Rs. 30,360 cr., having 1,529 branches, (327 branches in Metro, 355 in urban, 278 in semi urban and 569 in rural) and 8,955 employees only.

IDBI Bank is having 45.48% stake held by Govt, while LIC is holding 49.23% stake, with total promoter stake at 94.71%. Whether IDBI Bank be included in this intended 2 PSB privatisation or it could be third one in FY22 as well?

Between BoM and PSB, any prospective acquirer will be keen to acquire BoM. Market gives multibagger returns, if such futuristc news flows turn out to be true.
This is not a Buy recommendation and stock recommendations are only provided exclusively to our paid members in the Member Zone.

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