The promoters of Kotak Mahindra Bank would prefer taking the ‘mergers and acquisitions’ route to diluting the promoters’ stake in the bank — to 20 per cent by March 2018, in line with the RBI’s directive.
This was stated by the bank’s promoter, Mr Uday Kotak, in a conference call with analysts and confirmed to Business Line today by the bank’s President and Group CFO, Mr Jaimin Bhatt.
The promoters have 45.25 per cent stake in the bank today. Mr Uday Kotak himself has 41.25 per cent.
Mr Bhatt observed that they had six years time to meet the RBI’s directive. Quoting Mr Kotak, he said the bank would like to take over another bank and merge it with itself. (The process would bring down the promoter’s stake.)
When the bank was granted a license in 2003, one of the conditions was that the promoters’ holding would have to be locked-in at 49 per cent for at least five years. There was, however, no condition of dilution at the end of this five-year period.
However, the RBI has been requiring bank promoters to pare their holdings to 10-15 per cent. Kotak Mahindra has said in previous conference calls that the promoters would reduce their stake gradually, in a non-disruptive manner.
But recently the RBI asked the bank’s promoters to reduce their stake to 20 per cent by March 2018 and further below that later.