From Rs 9 to Rs 60! Govt may offload 5% stake in this multibagger PSU bank; check targets

Bank of Maharashtra stake sale: Government of India is likely to offload 5 per cent stake in PSU lender Bank of Maharashtra to meet the minimum public shareholding norms. The multibagger state-run lender dropped nearly 2 per cent during the trading session on Monday, after hitting its 52-week high last month.

Bank of Maharashtra dropped nearly 1.87 per cent to Rs 57.25 on Monday, with its total market capitalization slipping below Rs 45,000 crore. The PSU lender had hit its 52-week high at Rs 61.55 on November 19, 2025, while it has zoomed 54 per cent from its 52-week lows at Rs 38.11 in April 2024. The stock has soared more than 565 per cent from its covid-19 lows around Rs 9 apiece.

According to a report from CNBC-TV18, the proposed stake sale is aimed at moving the bank closer to the mandated 25 per cent public shareholding requirement. The government owned 79.60 per cent stake in the bank as of September 2025 and the proposed sale of up to 5 per cent may results in shareholding below 75 per cent.

Bank of Maharasthra, alike some other PSU banks and Life Corporation of India, has been given exemption from the minimum shareholding norm. Usually, all the listed companies are required to take the public shareholding to a minimum level of 25 per cent within three years of listing or relisting.

Among other key shareholders, LIC owns more than 7.10 per cent stake in the PSU lender, while mutual funds and banks own 1.17 per cent and 0.57 per cent stake respectively. More than 9.58 lakh retail investors owned 6.83 per cent stake in Bank of Maharashtra, as of September 30, 2025.

Bank of Maharashtra had completed a Rs 3,500-crore qualified institutional placement in October 2024 to strengthen its capital buffers and progress toward meeting public shareholding rules. PSU lenders have been on the radar since Finance Minister Nirmala Sitharaman said last month that work had begun on the next phase of consolidation among these lenders.

Globe Capital maintains an 'Overweight' rating on Bank of Maharashtra with a target price of Rs 75. The bank’s net interest income is expected to grow 20%-22% in FY26 and FY27, with stable asset quality. Book value is projected at Rs 35 and Rs 48 during the same period. The target price is based on a 3-year median PB of 1.56, said Globe Capital.

Bank of Maharashtra reported a 23.2 per cent year-on-year (YoY) jump in the net profit to Rs 1,633 crore, while its net interest income or core income (NII) grew 15.7 per cent YoY to Rs 3,248 crore for the September 2025 quarter. Its gross non-performing assets (NPA) increased to Rs 4,372 crore but dropped in percentage terms to 1.72 per cent on a sequential basis.

Bank of Maharashtra reported healthy Q2FY26 earnings on the back of lower provisions, strong traction in other income, and lower opex intensity. Loan growth was strong, with growth largely driven by retail and corporate segments. Deposit growth was soft while CASA ratio remained stable at 50 per cent on account of strong traction in savings accounts, said HDFC Securities.

"Credit costs eased on the back of better asset quality in the retail segment. We believe BOMH has a superior deposit franchise, stemming from sticky and sizable state and public account balances. We raise our FY26-FY27E estimates and factor in additional provisioning impact of Rs 500 crore for FY28E," it added with a target price of Rs 70 and a 'buy' rating.

Bank of Maharashtra (BoM), established in 1935, is one of India's leading public sector banks, offering a wide range of banking and financial services. The bank plays a vital role in supporting small and medium enterprises (SMEs) and has a significant footprint in rural and semi-urban areas.

Geojit Investments has a 'buy' rating on the stock with a target price of Rs 68 as it said that the lender is currently trading at a P/Bv of 1.5 times with a strong ROA and RoE of 1.75 per cent and 23 per cent as of FY25, respectively.