Uday Kotak sells 2.9% stake in bank

Raises ₹6,900 crore as more than 100 investors lap up shares

Uday Kotak, promoter of Kotak Mahindra Bank, sold 56 million shares in the secondary market on Tuesday, which was subscribed to by more than 100 investors, for ₹6,900 crore.

Kotak Mahindra Bank had hammered a deal with the RBI in January to dilute promoter stake to 26% within six months from the date of the final approval from the banking regulator. Prior to today’s transaction, Mr. Kotak had 29.63% share in the bank, while the promoter group had 29.89% stake. According to the bulk deal data of BSE, 56 million shares, or 2.93%, was sold by Mr. Kotak to 130 investors at ₹1,240 per share. The total value of the sale is around ₹6,900 crore.

Some of the investors were The Regiments of the University of California (₹680.75 crore), Oppenheimer Developing Markets Fund (₹662.92 crore), JP Morgan Securities (₹506.91 crore), SBI Mutual Fund (₹408.46 crore), Aditya Birla Sunlife Mutual Fund (₹385.77 crore), Canada Pension Plan Investment Board (₹378.33 crore), among others.

Mr. Kotak’s voting rights have been capped at 15% wth effect from April 1, 2020, despite his actual shareholding being higher, as per the agreement with RBI.

Shares of Kotak Mahindra Bank ended 7.5% higher at BSE to close the day at ₹1,343.20 a piece.

Separately, at a Confederation of Indian Industry event, Mr. Kotak said the Indian banking sector would need ₹3 lakh crore to ₹4 lakh crore capital to absorb losses.

“The total banking sector loans to the real world is about ₹100 lakh crore. Total banking sector capital today is ₹11-12 lakh crore. Still ₹3 lakh crore of losses the banking sector has to pay,” Mr. Kotak said.

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Printable version | Jul 12, 2020 8:30:02 AM |

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