Kotak Bank seeks FIPB nod to hike foreign holding to 55%

Private sector Kotak Mahindra Bank has approached the Foreign Investment Promotion Board (FIPB) to hike foreign investment ceiling in the bank to 55%.

At present, foreign investors, including FIIs, FPIs, and foreign banks, together hold 48.5% in Kotak Bank pursuant to its merger with ING Vysya Bank.

Foreign investors can acquire up to 49% stake in Indian lenders through automatic route, but beyond that requires the nod of FIPB, headed by the Economic Affairs Secretary in the Finance Ministry.

"Kotak Mahindra Bank's application for an approval to increase the aggregate ceiling on foreign investment to 55% is currently under the consideration by the FIPB," Kotak Bank said.

Out of the 48.55% holding of foreign investors, FIIs hold 33.46%, foreign portfolio investors hold 2.43%, foreign bodies 8.11% and foreign banks 3.60%.

In November, Kotak Mahindra Bank had announced the acquisition of mid-sized private sector ING Vysya Bank in an all-share deal worth Rs 15,000 crore.

As part of the deal, 725 equity shares of Rs 5 each (face value) of Kotak Mahindra were to be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.

Promoters hold 33.91% stake in Kotak Bank.

Shares of the company were trading at Rs 1353.45, down 1.21% on the BSE.