State-owned Bank of Maharashtra (BoM) is confident of achieving the mandated 25 percent minimum public shareholding norm after undertaking one more tranche of fundraising within the current fiscal year. Managing Director & CEO Nidhu Saxena confirmed this on Monday, highlighting that an additional round of share sales would not only enhance the bank's capital adequacy but also help in reducing the government's stake.

The Ministry of Finance has instructed five public-sector banks, including BoM, to increase their public shareholding to 25 percent by August 1, 2026. This directive is in adherence to the Securities Contract Rules issued by the Securities and Exchange Board of India (SEBI), which stipulate that all listed companies, including public sector entities, must maintain a minimum public shareholding of 25 percent. SEBI has granted forbearance to Central Public Sector Enterprises (CPSEs) and public sector financial institutions until August 2026 to comply with this regulation.

Currently, the government holds a significant 79.6 percent stake in the Pune-headquartered bank. BoM's public shareholding recently increased to 20.4 percent from 13.5 percent at the end of September, following a successful Qualified Institutional Placement (QIP) in October that raised ₹3,500 crore. According to Saxena, if the bank raises approximately ₹2,000-2,500 crore, based on its current market capitalization, the government's holding would fall below the 75 percent mark. The bank has already secured approval for a broader ₹7,500 crore fundraise, encompassing both debt and equity, to ensure it has sufficient headroom.

The exact mechanism for the upcoming fundraising is still under evaluation, with the bank considering either a qualified institution route or an offer for sale route. BoM is considered relatively well-positioned among the five public-sector banks tasked with reducing government stake. Other banks facing similar mandates include Indian Overseas Bank (government holding 94.6 percent), Punjab & Sind Bank (93.9 percent), UCO Bank (91 percent), and Central Bank of India (89.3 percent).

In terms of financial performance, Bank of Maharashtra reported a net profit of ₹1,593 crore in the June quarter, marking a 23 percent increase, primarily driven by a rise in interest income. Saxena also noted that the bank is not overly concerned about a potential fall in treasury income during the July-September quarter, an sentiment shared by many of its peers. Furthermore, transactions on the Reserve Bank of India's Unified Lending Interface are showing signs of picking up, albeit at a slower pace initially, with expectations for improvement over time.