Bank of Maharashtra - Ek Anaar Sau Bimmar

By Research Desk
about 24 days ago

Indian-Canadian billionaire, Hyderabad born, Prem Watsa is interested in acquiring Bank of Maharashtra, (BoM) as per informed circles and is keen to pay up to Rs. 50 per share. Watsa has been called the "Canadian Warren Buffett”, is the founder and chief executive of Fairfax Financial Holdings, which has plans to invest US $ 5 billion in India (Rs.36,000 crore) in the next 5 years. Prem Watsa has been a great admirer of leadership of Narendra Modi. Fairfax is the promoter of CSB Bank holding 49.74% stake in CSB. Fairfax is also owning Bengaluru airport with 54% stake, as also, are investors in IIFL Wealth, IIFL Finace, NSE and few other Indian companies.

BoM has 1,874 Branches, with 1.50 crore customers and is the largest bank in Maharahtra State. On 18th February, in this section here, we gave the strong possibility of BoM seen as a  privatisation candidate in  FY 22, pursuant to FM having stated in her Budget speech, of atleast 2 PSB seen getting privatised in FY22. This privatisation move, whenever initaited, will evince strong interest by NBFCs like Bajaj Finance, M&M, AB Capital, Magma Fin of Poonawala, L&T Fin, Tatas, HDB Finacial, Shriram, Cholamandalam, Piramal, while this list is long, as all present NBFCs will be keen to convert them in bank, which will see valuation of BoM seen going up gradually from here in the next 6-8 months, depending on its final acquirer.

BoM was in UC yesterday, while more buying by quality investors will see stoc rising gradually in nenxt 2-3 months. We won't be surprised to see new names getting added in this list, of willing acquirer, as we have not included existing private sector banks and mid sized NBFCs. Looks like ek annar sau bimmar (100 sick persons vying for 1 Pomegranate).

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

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