Uday Kotak trims stake in Kotak Mahindra Bank to 19.70% from around 30% earlier

New Delhi: Uday Kotak, the founder, and promoter of Kotak Mahindra Bank, has pared down his stake in the bank to 19.70 percent from about 30 percent following issuance of preference shares.

The stake dilution of the promoter is in line with RBI’s directive.

The bank has “approved the allotment of 100,00,00,000 Perpetual Non-Cumulative Preference Shares (PNCPS) to eligible investors at the issue price of Rs 5 per PNCPS, aggregating to Rs 500 crore pursuant to the issue,” Kotak Mahindra Bank said in a BSE filing.

Subsequent to this issue, the paid-up capital of the bank has increased from Rs 953.16 crore to Rs 1,453.16 crore and the promoter holding is 19.70 percent of the paid-up capital, it said. Kotak’s holding in the bank prior to the preference share issuance was 29.74 percent.

The preference shares have been issued through private placement. The promoters’ position in terms of voting rights will remain the same as earlier as banking laws cap voting rights at 15 percent, irrespective of shareholding.

RBI had earlier asked promoters of Kotak Mahindra Bank to bring down their stake to 20 percent by December 2018 and 15 percent by March 2020 in line with the guidelines for new bank licenses released four years ago.

Kotak had previously sold his stake in May last year. He sold 1.8 crore shares of the bank for a little over Rs 1,687 crore resulting in dilution of his stake to 29.74 percent.