Bank of Maharashtra received the approval of its shareholders to raise up to Rs. 5,000 crores in equity capital on Thursday. It will allow the bank to obtain capital through several means, including preference issue and right issue.
Per reports, the shareholders okayed the bank’s proposal in its annual general meeting, which was conducted virtually on Thursday, 24 June 2021. A regulatory filing to the stock exchange states that equity capital will be raised through QIP or preferential issue and FPO, among others.
In 2020 – 21, the Bank of Maharashtra led among various public sector lenders in terms of MSME and retail loan growth. It has the largest number of branches among all state-owned banks in Maharashtra.
Impact on the share price
The announcement of this approval had a positive impact on the Bank of Maharashtra’s share prices. It opened at Rs. 25.25 on the National Stock Exchange on Friday and recorded an intra-day high at Rs. 25.95. However, it registered an intra-day low of Rs. 25.05. Its share price closed at Rs. 25.10 at the BSE and NSE.
Bank of Maharashtra registered a net profit of Rs. 165 crores in the January-March quarter of the fiscal year 2020-21. This was quite higher than its profit of Rs. 58 crores in the same quarter previous year.
In addition, its net interest income also soared by 35% year-on-year to Rs. 1,383 crores. Interestingly, the non-net interest income, which includes business incomes and other incomes, climbed a staggering 215% to Rs. 1,235 crores.
Bank of Maharashtra’s impressive quarterly performance attests to the company’s strong fundamentals and a strong customer base. Even through the ongoing crisis, it’s managed to outperform last year’s quarterly earnings with growth in virtually all areas. Moreover, the issuance of new stocks can further spur its development with a bolstered capital base.