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Kotak Mahindra Bank is in talks with the Reserve Bank of India on dilution of its promoter shareholding through the recent allotment of preferential shares.
Sources said the private sector lender has been in discussions with the RBI to allow its allotment of preferential shares in August as part of the promoter dilution roadmap, and has also pointed to the paucity of time for further dilution at present.
Deadline nearing
The move comes just months ahead of the December 2018 deadline for Kotak Mahindra Bank’s founder and promoter Uday Kotak to pare his stake in the lender.
As a last resort, the lender could also seek an extension of the deadline to March 31, 2019, to lower its stake.
“The bank is quite optimistic about its discussions with the RBI on the issue,” said a person familiar with the development.
Kotak Mahindra Bank declined to respond to an e-mail questionnaire by BusinessLine.
The RBI had mandated the bank to lower the promoter holding to less than 20 per cent by December 2018 and 15 per cent by March 2020.
To this end, the lender had, on August 2, issued non-convertible PNCPS on private placement basis to raise ₹500 crore, following which its paid-up capital had increased to ₹1,453.16 crore from ₹953.16 crore. It had also brought down Kotak’s stake to 19.70 per cent from 30 per cent.
The RBI had, however, said it did not meet the requirement for dilution of promoter holding.
On Monday, the scrip of Kotak Mahindra Bank gained 4.87 per cent to close at ₹1,104.60 apiece on the BSE.
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