Kotak Mahindra Bank gains after promoter pares stake

Kotak Mahindra Bank rose 2.62% to Rs 1,023.15 at 11:45 IST on BSE after the bank said a promoter group firm sold a 0.20% stake in the bank to comply with the central bank's guidelines on equity holding in local banks.

The bank made the announcement during trading hours today, 21 August 2014.

Meanwhile, the BSE Sensex was up 118.50 points, or 0.45%, to 26,432.79.

On BSE, so far 16.92 lakh shares were traded in the counter, compared with an average volume of 4.62 lakh shares in the past one quarter.

The stock hit a high of Rs 1,025.75 so far during the day, which is also a record high for the counter. The stock hit a low of Rs 995 so far during the day. The stock hit a 52-week low of Rs 588 on 28 August 2013.

The stock had outperformed the market over the past one month till 20 August 2014, rising 6.62% compared with 2.62% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 10.35% as against Sensex's 7.95% rise.

The large-cap company has an equity capital of Rs 385.40 crore. Face value per share is Rs 5.

Kotak Trustee Company, a promoter group entity of Kotak Mahindra Bank, on 21 August 2014 sold 16 lakh shares, or 0.20% equity, of the bank. The above sale has been undertaken pursuant to the Reserve Bank of India's (RBI) requirement to reduce the promoter shareholding in Kotak Mahindra Bank as communicated on 26 May 2014.

Earlier in May 2014, the RBI had ordered Kotak Mahindra Bank to bring down its promoter shareholding to 40% by 30 September 2014 per estimates provided by the bank. Kotak Mahindra Bank will then have until 31 December 2016 to cut its promoter shareholding to 30%.

As on 30 June 2014, promoters held 40.33% stake in Kotak Mahindra Bank. Among the promoter group, Uday Suresh Kotak held the largest stake of 39.75%.

Earlier in July 2014, the board of Kotak Mahindra Bank increased the ceiling limit for investment by foreign institutional investors (FIIs)/ sub-accounts of FIIs, foreign portfolio investors (FPIs) and qualified foreign investors (QFIs) in the share capital of the bank, through primary or secondary route to 40% with immediate effect after the shareholders of the bank at the annual general meeting held earlier during the day approved increase in ceiling limit. The total shareholding of FIIs/FPIs and QFIs in the bank stood at 33.57% as on 15 July 2014.

Kotak Mahindra Bank's net profit rose 6.69% to Rs 429.80 crore on 1.27% growth in total income to Rs 2686.11 crore in Q1 June 2014 over Q1 June 2013.

Kotak Mahindra group is one of India's leading financial services conglomerates.

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