Uday Kotak to sell 2.8% stake in Kotak Mahindra Bank

Uday Kotak to sell 2.8% stake in Kotak Mahindra Bank

Business

Uday Kotak, a veteran banker and MD of Kotak Mahindra Bank, is set to sell his 2.8 per cent stake. He will raise Rs 6800 crore by selling his stake in this bank. In this way, their stake in the bank will come down to 26.1 percent. Uday Kotak has taken this step according to the instructions from the Reserve Bank to reduce the promoter stake. Under this block deal, the price of one share of the bank will be between Rs 1,215 and Rs 1,240. Through this, an amount of Rs 6,804 crore to 6,944 crore will be raised.

In January, the Reserve Bank allowed Uday Kotak to limit his stake in the bank to 26 per cent. However, from April, the promoter’s voting rights were limited to 15 per cent. If Uday Kotak’s stake in the bank falls below 26 per cent, they will not be allowed to top it up. As per RBI rules, he has been given time till September to reduce his stake further by 0.1 per cent. Only then will it fully meet RBI’s rules to reduce promoter stake.

Last week, Kotak Mahindra Bank raised Rs 7442.5 crore through QIP. Under this, 6.5 crore shares were issued at the rate of Rs 1,145 per share. With this, the share of Uday Kotak was reduced to 29 per cent. According to RBI rules, promoters of private banks have to reduce their stake to 40% within three years of obtaining bank license. Within ten years of acquiring a bank license, it has to be reduced to 20 percent and within fifteen years it has to be reduced to 15 percent.

Jason Amato

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