Bank of Maharashtra soars 20% as over 3 million shares change hands on BSE

Shares of public sector lender Bank of Maharashtra surged as much as 20 per cent to hit an intra-day high of 27.3 apiece on the BSE on Tuesday after over three million shares changed hands on the counter in multiple block deals. At 3:20 am, the stock was ruling 19 per cent higher at Rs 27 per cent as against a 1 per cent gain in the benchmark Sensex index. About 3.2 million shares had changed hands on the counter on the BSE till the time of writing of this report.

According to data provided by BSE, 41,590 shares changed hands on the stock on the exchange at 9:15 am; 44,353 shares at 9:20 am; 44,113 shares at 9:25 am; 54,630 shares at 9:30 am; 53,575 shares at 9:31 am; and 79,068 shares at 9:32 am. These were coupled with 13 other block deals with shares changing hands in the range of 6,000 to 40,000 per block.

So far in the calendar year 2021, the stock of the PSB has rallied 74.4 per cent till Monday as against a 0.2 per cent gain in the benchmark Sensex index during the same period. The stock witnessed a breakout on the upside on February 15 after news agency Reuters reported that the bank could be one of the four PSBs which the government may privatise during the on-going financial year.

"India's government has shortlisted four mid-sized state-run banks for privatisation, under a new push to sell state assets and shore up government revenues... The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India," two officials told Reuters.

Meanwhile, Business Standard reported on April 9 that senior officials of the Niti Aayog, the Reserve Bank of India (RBI), and the finance ministry’s financial services and economic affairs departments are expected to meet on April 14 (Wednesday) to discuss the potential candidates for privatisation.

"Four to five PSBs have been suggested by the Niti Aayog and they will be discussed in the meeting.. The names could include Bank of Maharashtra and Indian Overseas Bank," the report added.

The Aayog is learnt to have prepared a report on PSBs based on their financials, debt and other issues, and accordingly short-listed them. The government may pump in some liquidity in those banks that are currently under the RBI’s prompt corrective action framework, and may consider them for either privatisation or merger once they are out of it.

The government is considering mid-sized to small banks for its first round of privatisation to test the waters and may go for large banks sometime later.

In her Budget speech, Finance Minister Nirmala Sitharaman had announced privatising two public sector banks and one general insurance company in 2021-22. According to the new Public Sector Enterprise policy for Aatmanirbhar Bharat, the Aayog is mandated to recommend the names of PSUs in strategic sectors to be privatised, merged, or made subsidiaries of other PSUs.

Strategic sectors in which the government intends to keep a “bare minimum” presence include atomic energy, space, defence, transport, telecommunications, power, petroleum, coal, banking, insurance, and financial services.