The Muthoot Pappachan Group, a diversified one, has picked up one per cent stake in the private sector Catholic Syrian Bank, whose largest shareholder, Bangkok-based Sura Chansrichawla, was asked by RBI to lower his stake to 10 per cent.
“We have picked up one per cent stake in Catholic Syrian Bank (CSB) through open market transaction and are keen to increase our holding to five per cent over the next three to six months as per the regulations,” Group Chairman and Managing Director Thomas John Muthoot said from Thiruvananthapuram.
He, however, did not disclose the deal size.
To a specific query on whether the stake was bought from Chansrichawla, the bank’s largest stakeholder, Muthoot said, “We picked up the shares from the open market.”
“The Muthoot Pappachan Group has agreed to pick up 0.99 per cent stake in our bank and they are in talks to increase the stake to five per cent,” one of the CSB directors, K Ipe Peter, said in Thrissur.
On valuation, Muthoot said, “We didn’t pay any premium, as there are plenty of shares available in the market.” As to what does it signify for the largest financial services group in Kerala, Muthoot said, “this is a good investment opportunity for us.”
The share purchase comes on the heels of Edelweiss Capital raising its stake in CSB to 4.9 per cent for an undisclosed amount from the earlier one per cent.
The Rs 20,000-crore Muthoot Pappachan Group is into non-banking financial services, gold loans, realty, power and hospitality among others.
The unlisted CSB has been in the news for some time since Chansrichawla, who now holds a little over 20 per cent stake in the bank, was asked by RBI to bring down his stake to 10 per cent by last March.
The RBI came down on Chansrichawla when his stake crossed more than 30 per cent.