Kotak Mahindra Bank spurts on Goldman Sach stake buy

DALAL STREET SPIKES

Shares of Kotak Mahindra Bank spurted more than five per cent within the first hour of trading after the company announced that it would buy out the 25 per cent stake held by Goldman Sach in two of its subsidiaries.

The shares of the bank, which gained steadily throughout last year but has been idling around the Rs 230 mark since the beginning of this year, was up 7.21 per cent, at Rs 246.95 by the end of the day's trade on the BSE. Volumes were around double the normal, at around 9.4 lakhs on the BSE on Thursday.

Kotak Bank has announced that it would be buying Goldman Sachs' (Mauritius) 25 per cent in its subsidiaries Kotak Mahindra Capital Company (KMCC) and Kotak Securities (KS) for Rs 333 crore. While Rs 210 crore will be used for the purchase of the shares of KMCC, the balance, Rs 123 crore, has been allocated for the Securities arm.

The merchant banking subsidiary, KMCC and the retail investment and brokerage arm, Kotak Securities, have benefited enormously from the spurt in investment activity in the country last year.