2 days back, we have stated here of possibilities of Bank of Maharashtra getting privatised in FY 2022. In last 2 days with 2 UC of 20% and today UC of 10%, stock rose by 58% and still seen in UC. It seems that market is vindicating our presumption as well. On digging data further on Bank of Maharashtra, we feel more confident now on its fundamentals.
Net Profit for Q3FY21 of Bank is up by 13.91% YoY to Rs. 154 crore. Operating profit increased by 7.18% to Rs 902 crore. Net Interest Income increased by 10.12% to Rs. 1,306 crore. Net Interest Margin (NIM) improved to 3.06% against 2.86%. Retail, Agri & MSME Business increased by 21.25%. CASA improved to 50.91%. Provision Coverage Ratio improved to 90%. Gross NPA improved to 7.69% against 16.77%. Net NPA improved to 2.59% against 5.46%.
Equity of Bank, as at 31-12-2020, is at Rs.6,560 crores, with FV of Rs. 10, with Net Worth of Rs. 10,706 crores, resulting in a Book Value of Rs. 16.32 per share. Promoter stake (Govt of India) is holding 93.33%, Institutional investors have 3.60% and HNIs 1%. This leaves float of just 2% with public, being 13 crore shares only, having present value of Rs. 300 crores. In last 2 days, delivery volume of 3.65 crore shares were seen, having bought by the value investors.
Bank has 1,874 Branches, with 1.50 crore customers and is the largest bank in Maharahtra State. On privatisation move, whenever initaited, will see strong interest by NBFCs like Bajaj, M&M, Aditya Birla, Poonawala, L&T, Shriram, Cholamandalam, Piramal, list is long, which will see vast re rating of the stock, depending on its final acquirer. Share has potential even to rise by 100%, from here in the year 2021. So if someone is holding it, no need to be in a hurry or impulsive to book gains.
One more caution, avoid lapping any other PSU bank, on hopes of expected privatisation move of the Government in FY 2022.