InvestorQ : Why is Bank of Maharashtra planning a QIP placement at this juncture?
Mitali Bhutta made post

Why is Bank of Maharashtra planning a QIP placement at this juncture?

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1 week ago
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With an improvement in financials, Bank of Maharashtra or BOM is looking to spruce up its capital base in a big way. Bank of Maharashtra has just fixed the floor price of Rs.24.89 per share for its proposed QIP which would be worth Rs.2,000 crore. It is expected that BOM may even offer a 5% discount on the floor price at its discretion to the applicants. The QIP has a base size of Rs.1,000 crore with Greenshoe option of another Rs.1,000 crore.

This QIP, when completed, will reduce the government stake in BOM from 94% to below 85%. At the same time, the capital adequacy of the bank will improve from 16% to 18%. BOM plans to utilize these funds for expanding its loan book at a rapid clip of 16-18% in FY22. BOM recently saw its gross NPAs falling lower from 18.64% to 7.23%. This led to removal of BOM from the prompt correction action or PCA listing, allowing it to grow.

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