LIC raises stake in Kotak Mahindra Bank to 3.18%


Life Insurance Corporation of India (LIC) has increased its stake in Kotak Mahindra Bank by 0,73 percent in the second quarter, according to the latest stock exchange data.

LIC has increased its shareholding to 3.18 per cent from 2.45 per cent in the second quarter, the Kotak Mahindra Bank’s latest shareholding pattern shows.

Other major public shareholders in the bank include SBI Mutual Fund (2.81 per cent), Axis Mutual Fund (1.51 per cent), Canada Pension Plan Investment Board (6.38 per cent), Europacific Growth Fund (4.98 per cent), Oppenheimer Developing markets fund (3.34 per cent) among others.

Promoters, Uday Kotak and his family hold 26 percent stake in the bank. In June this year, Uday Kotak had sold 2.8 percent stake in the bank through block deals for about Rs 6,900 crores.

In January, the RBI let KMB retain the 26 percent promoter stake with some riders. The RBI let the promoters, Uday Kotak and family, retain 26 percent stake but capped the voting rights at 15 percent by April.

Earlier, the bank and the RBI had locked horns over the promoter holding issue in Court. According to the RBI norms, Kotak had to pare promoter stake below 20 percent before December 31, 2018, from around 30 percent.

In August 2018, the bank announced the completion of perpetual noncumulative preference share issue (PNCPS), which it interpreted as cutting the promoter stake to 19.7 percent.

The bank claimed it is complying with the RBI licencing norms through this deal but RBI didn’t buy it. The regulator said preference share allotment route wasn’t sufficient to meet promoter dilution rule requirement. But the bank’s legal argument was PNCPS was part of the paid-up capital. With the impasse continuing and the deadline for stake dilution fast approaching, KMB finally decided to move High Court of Bombay.

Later, both parties agreed on an out-of-the-court settlement and RBI let the promoters retain 26 per cent with some conditions.

Mews Source:- Moneycontrol

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