Bank of Maharashtra raises Rs 200 crore under tier II bond programme

State-run Bank of Maharashtra on Monday said it has raised over Rs 200 crore through private placement of Basel III-compliant tier II bonds.

The fund raise is part of the lender’s Rs 1,000 crore tier II bond programme.

“The bank has successfully raised a capital of Rs 200.70 crore through private placement of Basel III compliant tier II bonds, the lender said in a filing to exchanges.

The coupon offered on the bond was 7.75 per cent.

Last week, Brickwork Ratings had reaffirmed AA rating of the lender’s tier II bonds worth Rs 1,000 crore. The outlook was also reaffirmed as stable.

The domestic rating agency had also assigned AA- rating to Bank of Maharashtra’s Rs 1,000 crore of Basel III compliant additional tier I bonds with a stable outlook.

“The rating assignment/reaffirmation factors in the strong support from the government, over 10 per cent growth in business, and adequate capitalisation and resource profile as of September 30, 2020,” the rating agency had said in a note on its website.

The government’s shareholding in the bank stood at 93.3 per cent as of September 2020. Over the last few years, the bank has received a capital infusion of Rs 20,000 crore from the government.

The lender gets 60 per cent of its business from Maharashtra. The business size of Rs 2.62 trillion includes deposits of Rs 1.58 trillion, while advances crossed Rs 1 trillion as of September 30, 2020.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor