Canadian fund picks 3.24% in Kotak Mahindra Bank

Rs 880 was paid per share against the prevailing price of Rs 850-855 at the exchanges

Within days of it being told to cut promoter holding, private sector lender Kotak Mahindra Bank on Friday said a promoter group entity had sold 3.24 per cent stake to the  Canada Pension Plan Investment Board at a premium of over 3 per cent to trading price.     

“It was a bulk deal which happened on the exchanges. We have been told that the Canada Pension Plan Investment Board has picked up 25 million shares in the bank...We are very pleased at this,” the bank's head of group strategy Paul Parambi said.     

The fund paid Rs 880 per share against the prevailing price of Rs 850-855 on the exchanges, he said.

The Uday Kotak-led bank scrip was up 0.88 per cent and closed the day at Rs 867.55.     

The stake sale by Kotak Trustee Company reduces the promoter shareholding to 40.33 per cent, from 43.58 percent earlier.

"The present sale by the promoters helps us substantially meet the RBI requirement for promoter dilution by September 30, 2014," Parambi said.     

The announcement comes three days after the lender said it has been asked by the sector regulator Reserve Bank of India to cut the promoter shareholding to 40 per cent by September and to 30 per cent by December 2016.     

The RBI wants promoters in private sector banks to scale down their holding to 10 per cent in order to have a diverse ownership base at lenders.

Each bank had submitted a plan under which it will be bringing down the shareholding.