Kotak Reduces Promoter Shareholding To Meet RBI Mandate
The promoters of Kotak Mahindra Bank Ltd. have reduced their shareholding in the lender after a preferential issue of non-convertible shares, in line with a directive by the Reserve Bank of India.
The private lender raised Rs 500 crore by issuing 1 crore non-convertible perpetual non-cumulative preference shares of Rs 5 each to eligible investors, according to its stock exchange filing. As a result, the promoters of the bank now hold 19.7 percent stake compared with 30.3 percent as of June-end.
These are non-convertible, perpetual non-cumulative shares. It is though, part of the Tier-1 capital for banks...we have intimated to the RBI last night after the issuance closed.Jaimin Bhatt, President and Group Chief Financial Officer, Kotak Mahindra Bank
India's banking watchdog had directed Uday Kotak, the bank's managing director and executive vice chairman, to reduce promoter shareholding to 30 percent by June 2017 and 20 percent by December 2018. The bank will now have to reduce the promoter holding to 15 percent by March 2020 in line with the guidelines for new bank licences released four years ago.
Kotak Mahindra Bank's stock had closed 2.5 percent lower today, compared with a 0.9 percent drop in the benchmark S&P BSE Sensex.
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