M&M to sell entire 3.45% stake in RBL Bank via ₹682-cr block deal

The automaker's full exit from RBL Bank via a Rs 682 crore block deal brings a 64 per cent return on its year-old investment

Mahindra & Mahindra (M&M) is selling its entire 3.45 per cent stake in RBL Bank through a block deal, according to a news agency . The transaction is valued at ₹682 crore, marking the automaker’s complete exit from the private lender after little over a year of investment, Bloomberg said.

 

The floor price for the block has been fixed at ₹317 per share, which is a discount of around 2.1 per cent to the bank’s current market price. An email sent to M&M remained unanswered till the time of going to press.

 

The move culminates in a significant profit for the automaker, as M&M is set to make a whopping 64 per cent return on its ₹ 417 crore investment made in July 2023. At that time, M&M picked up the minority stake in RBL Bank for ₹197 per share.

 

M&M had in August 2023 made it clear that it had no intention of investing further in the bank.

 

The swift exit confirms the automaker’s strategic intent, which was articulated shortly after the initial investment. M&M’s managing director and CEO, Anish Shah, had made it clear in August 2023 that the company had no intention of investing further in the bank.

 

“There is no intention of going further at this point. But it helps us understand the sector a lot better to enhance the value of a business that is nearly a ₹40,000 market capitalisation,” Shah said at the time.

 

The successful, profitable divestment suggests that M&M’s goal of gaining better insight into the banking sector has been achieved, leading to the sale of its full holding.