Mumbai: Kotak Mahindra Bank's key promoter and Chairman & Managing Director - billionaire Uday Kotak is expected to sell some of his shares to comply with a Reserve Bank of India mandate.
Reports have emerged that a block deal could be conducted during Tuesday trade that would see 2.83 percent equity stake held by Kotak in the bank. The placement agents of the block deal are Kotak Securities, Morgan Stanley and Goldman Sachs.
This will be 5.6 crore equity shares estimated at approximately $900 million or Rs 6,944 crores. At lower end of Rs 1,215 per share the sale could fetch Rs 6,804 crores. At the higher band of Rs 1,240 per share, the deal may fetch Rs 6,944 crores.
The discount range will be 1.5 per cent discount (at top end of offer price range) and 3.5 per cent discount (at Floor Price) to the VWAP price of Rs 1,258.48 as on June 1, 2020 on the National Stock Exchange of India.
The lock up stipulation is that the seller will not sell equity shares of the Bank for 60 days from May 29, subject to such restriction not being applicable on sale of equity shares of the bank by one or more members of the promoter group of the bank that progress towards the RBI's requirement to reduce the current promoter shareholding in the bank to 26 per cent of the paid-up voting equity share capital of the company.
Uday Kotak, as on date owns 28.93 percent stakes in Kotak Mahindra Bank. Through the just-concluded the QIP issue worth Rs 7,000 crore, promoter holding in the bank came down by a tad over 1 per cent from 29.8 per cent. Post the block deal, his stakes are estimated to drop to 26.10 percent. Several reports claim that the objective by Kotak is towards compliance with Reserve Bank of India's requirement to reduce promoters' shareholding in the Bank to 26 percent of its paid up voting equity share capital by August 17, 2020.
On Monday, the scrip gained nearly 2 per cent to Rs 1,248.40 on the NSE. On the BSE, it ended at Rs 1,251.90, up 2.30 per cent with a market capitalisation of Rs 2,39,588.62 crore on a day when the Sensex rallied 2.71 per cent.
If the block deal goes through, Asia's richest banker could see his fortunes sizzle a little north.