MahaBank IPO subscribed 10.5 times

Bank of Maharashtra's (BoM) Rs 230 crore initial public offer (IPO) was subscribed 10.5 times. The bank collected Rs 2,364 crore even at a time when the government was out in the market to divest its holding in six public sector enterprises to mop up Rs 16,000 crore.

What is interesting in the case of BoM's IPO is that the bank will be able to earn interest on the float money before it is refunded to the investing public.

Even if BoM were to invest the same in the repo market, it would earn 4.5 per cent interest till it makes the allotment by the month end.

This would add good other income to the bank's bottomline, which will be reflected in its March ending balance sheet. Under the book-building route, which the government has opted for, allotment has to be undertaken within a fortnight.