Infomerics Valuation and Rating Limited has reaffirmed the ratings on Bank of Maharashtra’s (BoM) Basel III Compliant Tier II bonds at IVR AA+/Stable and Tier I bonds at IVR AA/Stable as of March 11, 2026. The affirmation reflects sovereign ownership, strong capital adequacy, improved asset quality, and a healthy resource profile. The ratings are supported by expected continued government support, although constrained by moderate size and geographic concentration.
Rating Reaffirmation Announcement
Bank of Maharashtra (BoM) announced on March 11, 2026, that Infomerics Valuation and Rating Limited has reaffirmed the credit ratings on its outstanding debt instruments. The reaffirmation confirms the stability of the bank’s financial profile despite moderate size constraints.
Ratings Summary
The following ratings were reaffirmed for the respective securities:
- Proposed Basel III Compliant Tier II Bonds: IVR AA+/Stable
- Basel III Compliant Tier II Bonds (Various Series): IVR AA+/Stable
- Basel III Compliant Additional Tier I (AT-I) Bonds: IVR AA/Stable
The total value of the instruments covered in this reaffirmation stands at Rs. 3000.00 Crore.
Key Rating Strengths and Drivers
Sovereign Ownership and Support
A primary strength remains the Government of India’s (GoI) majority ownership, holding a 73.60% stake as of December 31, 2025. This suggests a strong likelihood of timely capital infusions and operational support if required. Infomerics expects this support to continue, given the strategic importance of Public Sector Banks (PSBs).
Adequate Capitalisation
BoM’s capital profile remains robust. As of December 31, 2025, the CET-1 ratio stood at 13.10%, Tier-I CAR at 13.95%, and Overall CAR at 17.06%. The bank augmented its capital base during FY25, raising Rs. 3,500 crore via QIP and issuing Rs. 1,000 crore in Tier-II bonds. Future plans include raising up to Rs. 7,500 crore through various instruments.
Loan Book Growth and Resource Profile
The advances profile showed healthy growth, increasing by approximately 20% y-o-y to Rs. 2,73,502 crore as of December 31, 2025. The Retail, Agriculture, and MSME (RAM) segment continues to be a significant driver, accounting for ~63% of total advances. Furthermore, the resource profile is healthy, with the CASA deposit ratio remaining high at 49.54% as of the same date, well above the industry average of ~39%.
Asset Quality Improvement
Asset quality has shown significant positive movement. Gross NPAs declined to 1.60% as on December 31, 2025 (from 1.74% on March 31, 2025). The Net NPA improved to 0.15%. The Provision Coverage Ratio (PCR) remains strong at 98.41%.
Key Rating Sensitivities
Upward Triggers
Ratings could see positive movement based on substantial growth in profitability and capitalization, alongside substantial improvement in asset quality.
Downward Triggers
Potential risks include a material decline in GoI shareholding, a major increase in slippages leading to weak asset quality, or any material decline in overall capital adequacy ratios below current levels.
Instrument Specific Notes
Tier II Instruments: These carry a Point of Non-Viability (PONV) clause, which can lead to principal write-down or conversion to equity, a risk factored into the rating.
Additional Tier I (AT-I) Instruments: These instruments carry higher risk due to discretionary coupon payments and principal write-down triggers. The ratings are notched down from the Tier II bonds to reflect these risks.
About the Rating Agency
Infomerics Ratings assigned these ratings based on a standalone assessment, supplemented by expectations of GoI support, both ongoing and in distress scenarios. The agency confirmed its history of adhering to robust, in-depth research practices.
Source: BSE
