Kotak Mahindra Bank shares slipped about 1.2 per cent on Wednesday after the RBI asked it to reduce its promoters' shareholding.
The RBI informed the bank that it is required to reduce its promoters' shareholding to 40 per cent by September.
The shares opened a tad higher at Rs 873 per share against Tuesday’s close of 870.25 on the BSE. However, in the early trade itself, the scrip declined over 2 per cent to Rs 853.50.
At 1.45 p.m., the private sector bank’s shares were trading down by 1.30 per cent at Rs 858.90 per share on the BSE.
On the NSE too, the scrip was trading down by 1.22 per cent at Rs 860 per share.
The Uday Kotak-owned private sector bank in a release to the Bombay Stock Exchange on Tuesday said: “With reference to earlier announcement dated June 27, 2012, intimating RBI’s requirement to bring down the bank’s promoters' shareholding, Kotak Mahindra Bank Ltd has now informed the BSE that the bank has received a communication from the RBI to bring down its promoter shareholding to 40 per cent by September 30, 2014, as per estimates provided by the bank.”
Currently, the promoters' shareholding is 43.58 per cent. Hence, the bank’s promoters are required to shed 3.58 per cent of their share.
Of the total promoters' shareholding, 40.09 per cent is owned by individuals and Hindu undivided family, and 3.49 per cent is held through corporate bodies. The bank further needs to reduce the promoters' stake to 30 per cent by December 31, 2016.
In June 2012, the RBI had asked Kotak Mahindra Bank to reduce the promoters' holding to 20 per cent by 2018 and 10 per cent by 2020 from the then 45.21 per cent. This move is to diversify the promoters' shareholding and bring it in sync with the new banking licence regulations and thereby improve corporate governance.