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Informist, Monday, Aug. 25, 2025

 

By Sagar Sen and Priyasmita Dutta

 

MUMBAI – State-owned Bank of Maharashtra is looking to raise up to INR 30 billion in the first tranche of infrastructure bonds, its Managing Director and Chief Executive Officer Nidhu Saxena said Monday. The first tranche may come as early as next month if the rates are attractive, he said. "We are in an advanced stage of talks with investors, and the effort is on to raise money through the first tranche of infrastructure bonds by September. In case it doesn't happen by September, then in the next quarter," Saxena told Informist.

 

The Pune-based bank had earlier received board approval to raise up to INR 100 billion through infrastructure bonds in 2025-26 (Apr-Mar). Saxena said since it is not possible for the bank to raise funds in a single issuance, the bank will raise the amount in multiple tranches during the year. "We will examine the market conditions, and accordingly, we will time the issuances," he said on the sidelines of FIBAC 2025, organised by the Federation of Indian Chambers of Commerce and Industry and the Indian Banks Association. "We are in touch with domestic and foreign investors," Saxena said. 

 

Bank of Maharashtra had raised INR 16.12 billion through 10-year infrastructure bonds in February at a coupon of 7.70%. In August last year, the bank had raised INR 8.11 billion through 10-year infrastructure bonds at a coupon of 7.80%.

 

Banks benefit from raising funds through infrastructure bonds as these funds are exempt from regulatory reserve requirements, including the statutory liquidity ratio and cash reserve ratio. 

 

Saxena also said the bank was confident of meeting the minimum public shareholding norm of 25?ter one more tranche of equity fundraising in FY26. The fundraising will help the bank with both capital adequacy and lower the government's stake, Saxena said. Currently, the government holds 79.6% stake in the bank.

 

Based on the current market capitalisation, if the bank raises around INR 20 billion-INR 25 billion, the government's holding will fall below the 75% mark, Saxena said. To be on the safer side, the bank has obtained approval to raise up to INR 75 billion through debt and equity, Saxena said.

 

The government had, in August 2024, allowed five public sector banks — UCO Bank, Bank of Maharashtra, Central Bank of India, Indian Overseas Bank, and Punjab & Sind Bank — time till Aug. 1, 2026, to meet the public shareholding norms. As per the Securities Exchange Board of India's Securities Contract (Regulation) Rules, all listed companies, including public sector companies, must have a minimum public shareholding of 25%.

 

On business plans, Saxena said the bank is in talks with three to four non-banking finance companies for co-lending tie-ups, Saxena said. "We signed nine agreements last year, and we are in talks with three to four more NBFCs. These discussions are in different stages, and we believe they will be finalised by March-end," Saxena said without giving details. 

 

Bank of Maharashtra registered a net profit of INR 15.93 billion in the June quarter, up 23% on year, on a robust increase in interest income. The bank's interest income rose 20% on year to INR 70.54 billion during the quarter. Monday, the bank's shares ended 0.9% lower at INR 54.33 on the National Stock Exchange.   End

 

Edited by Saji George Titus

 

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