The Telegraph
Wednesday , May 28 , 2014
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Stake-cut deadline set for Kotak owners

Mumbai, May 27: The Reserve Bank of India has asked the promoters of Kotak Mahindra Bank to pare their shareholding.

The RBI wants the promoter stake to be reduced to 40 per cent by September 30 this year and to 30 per cent by December 31, 2016. At present, the promoter shareholding stands at 43.58 per cent. Of this, nearly 39.76 per cent are held by Uday Suresh Kotak and the rest by Kotak Trustee Company Pvt Ltd and others.

At the current price, the promoters will have to sell shares worth Rs 2,400 crore by September to comply with the RBI directive.

On the Bombay Stock Exchange, the shares of Kotak Mahindra Bank ended nearly a per cent higher at Rs 870.25.

In 2012, the central bank had asked the promoters of the private lender to trim their holding to 20 per cent by March 31, 2018. The latest direction is seen to be a part of this process.

Market circles maintain that the promoters will not find it difficult to offload their stake because the investor sentiment is positive with regard to private banks.

The shares of private lenders have seen a sharp surge in recent times on the expectation that the domestic economy is poised for a turnaround in the next few months. Moreover, these banks have reported better asset quality numbers than their state-owned peers.

It is believed that the apex bank may also ask promoters of other private banks to bring down their stakes. For instance, promoters hold nearly 25 per cent of Yes Bank.

Kotak Mahindra Bank has recently reported a net profit of Rs 407.18 crore for the quarter ended March compared with Rs 436.21 crore in the corresponding period of the previous year.

Gross non-performing assets on a standalone basis rose to Rs 1,059.44 crore from Rs 758.11 crore in the year-ago period. Advances for the full financial year stood at Rs 71,693 crore from Rs 66,258 crore in 2012-13. The lender has also seen a steady rise in its low-cost current and savings account deposits (CASA), which constitute around 32 per cent of the bank’s total deposits.

Piramal move

Piramal Enterprises today said it had integrated its real estate sector-focussed equity and debt entities to form one of the largest realty funding platforms in the country. “Integrating debt and equity platform into a combined entity will ensure that we are best positioned to gain valuable information, skills and insights,” chairman Ajay Piramal said.