| Kotak: Transition time
Calcutta, Jan. 16: Foreign institutional investors (FIIs) have built up a 9 per cent stake in Kotak Mahindra Finance Ltd (KMFL) ahead of its conversion into a commercial bank. KMFL announced its intentions of venturing into banking on April 15 last year.
KMFL — a non-banking finance company (NBFC) that started off as a bill discounting firm — has already obtained the requisite licence from the Reserve Bank of India and approval of its shareholders to turn itself into a bank.
While the company prepares to undertake banking business, foreign institutions have been steadily increasing its stake in it. Over the last four quarters, FIIs have raised their stake in the NBFC by 6.4 per cent.
Swiss Reinsurance Company — better known as Swiss Re — has acquired a 2 per cent stake in KMFL. Another institution, Oppenheimer Funds, holds 2.36 per cent in it.
The mutual funds too have shown some interest in the KMFL stock. They hold 2.51 per cent in it now, compared with a negligible 0.04 per cent a year ago.
The most significant increase in FII holding in KMFL took place between June and September — the second quarter of the current fiscal. During this period, foreign institutional holding shot up from 4.31 per cent to 8.01 per cent — an increase of 3.7 per cent.
The promoters of the company hold 63.01 per cent. Uday S. Kotak, the principal promoter of the company holds 51.72 per cent.
The Kotak Mahindra group runs a number of other related businesses like insurance and asset management. It also manages a venture capital fund.
It has joint ventures with the Old Mutual group for its insurance business, and Goldman Sachs for its investment bank known as Kotak Mahindra Capital Company.
Kotak mutual fund is planning to launch a host of bundled products to drive sales. It is offering free life insurance cover to investors of K-Bond Deposit Scheme. The offer is valid till the end of March. The management of the company says similar products are in the pipeline.