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The government has formally announced the process of selling its stake in Bank of Maharashtra and OFS will start from tomorrow. The Center will sell 5 percent stake and a green shoe option of 1 percent has also been added, taking the total disinvestment to 6 percent. The floor price has been fixed at Rs 54 and at current prices the government can get around Rs 1,800 crore. This step has come amid the ongoing consolidation process in PSU banks to meet the minimum public shareholding norms. The bank’s shares are up 11.4 percent this year and the market reaction after OFS will be important.
New DelhiThe government has finally confirmed the decision to sell stake in Bank of Maharashtra and it has also been formally announced, According to the notification issued by the Centre, the process of OFS i,e, Offer For Sale in the bank will start from Tuesday, in which first non-retail investors will get the opportunity and then on Wednesday, retail investors will be able to participate,
This step has come when the Center has to fulfill the rules of minimum public shareholding and the shares of this bank have been showing strong performance in recent months. The interesting thing is that this stake sale was indicated in CNBC TV18’s report today and now the Center has also confirmed it.
Government will sell 5 percent stake, green shoe of 1 percent
The government has made it clear that it will sell 5 percent of its stake in the bank and apart from this, a green shoe option of 1 percent has also been kept. Green shoe option is a provision in which a company or government can increase the sale of its shares if needed. Generally this is an additional share of 10-15% which is sold only when the demand for the shares is very high or to keep the offer stable. Meaning total disinvestment can reach 6 percent. The floor price of this OFS has been fixed at Rs 54 per share, which is less than the current market price.
September quarter figures show that the government holds 79.6 percent stake in the bank. Based on the current market price, the government can get approximately Rs 1,800 crore from the sale of just 5 percent stake.
After QIP, now the turn of public shareholding norms
The bank had completed QIP of Rs 3,500 crore in October 2024 to strengthen its capital base. After this it was clear that for the bank to reach the standards of minimum public shareholding, the government would have to reduce its stake. This is the reason why the timing of OFS is considered important from many aspects because government stake in PSU banks is constantly on the radar.
New consolidation story of PSU banks is also going on in the background
The focus on public sector banks has increased again in the last few weeks, especially since Finance Minister Nirmala Sitharaman had made it clear that the next consolidation phase would start soon. He had said on November 6 that the government has to discuss with the Reserve Bank of India i.e. RBI as to how big the banks want to grow and what will be the direction of consolidation.
Market experts believe that when government stake in a bank is above 75 percent, there is less liquidity in the market and investor interest decreases. This is the reason why Bank of Maharashtra’s OFS is being considered a part of comprehensive banking reforms.
Share situation and investors’ attention
The bank’s shares remained almost stable on Monday and were trading at Rs 58.6, slipping from the day’s high. The stock has risen 11.4 percent so far in the year 2025, which clearly shows that investors remain interested. How OFS will affect the mood of investors will become clear in the coming sessions.
