Mahindra & Mahindra slips 6% on acquiring 3.5% stake in RBL Bank

The company said it may consider further investment, subject to pricing, regulatory approvals, and required procedures, however, in no circumstance will it exceed 9.9 per cent.

Shares of Mahindra & Mahindra (M&M) slipped 6 per cent to Rs 1,456.30 on the BSE in Thursday’s intra-day trade after the company picked up a 3.53 per cent stake in private sector lender RBL Bank for Rs 417 crore.

The company said in an exchange notification on Wednesday that it may consider further investment, subject to pricing, regulatory approvals, and required procedures. However, in no circumstance will it exceed 9.9 per cent.

Meanwhile, shares of RBL Bank hit a fresh 52-week high of Rs 242.85, was up nearly 2 per cent in intra-day trade today. Since June 26, the stock of private sector lender has rallied 46 per cent from level of Rs 165.95. At 09:22 AM; it quoted 1 per cent lower at Rs 235.80, as compared to 0.4 per cent rise in the S&P BSE Sensex.

RBL Bank in an exchange filing said the holding of Mahindra & Mahindra Limited as per the last beneficiary position as on July 21, 2023 as received from the depository (NSDL) is 3.53 per cent of the total paid up share capital of the Bank.

“We being a listed company, for trading in the shares of the Bank there is no pre-approval required from the Bank except for the fact that as per the Master Direction – Reserve Bank of India (Acquisition and Holding of Shares or Voting Rights in Banking Companies) Directions, 2023, any shareholder who wishes to acquire 5 per cent or more of the shareholding of the Bank is required to make an application to Reserve Bank of India to seek their prior approval for such acquisition. No such application has been received by us till date”, RBL Bank said.

Technical View

Bias: Needs to conquer the 20-DMA

Support: Rs 1,467; Rs 1,422

Resistance: Rs 1,530

Owing to today's sharp fall, shares of Mahindra & Mahindra dipped below the 20-DMA (Daily Moving Average) for the first time since April 10, 2023. While the overall trend remains positive, the stock will need to conquer the 20-DMA at Rs 1,530 soon to regain strength.

Failure to surpass and trade above Rs 1,530, could weaken the trend in the coming trading sessions. On the downside, the stock is presently testing support at its super trend line at Rs 1,467, below which the next significant support stands at Rs 1,422 (50-DMA).

(With inputs from Rex Cano)