Kotak Mahindra Bank, Bandhan Bank and IndusInd Bank share prices soar with refinancing pulling them out of the red
- Kotak Mahindra Bank, Bandhan Bank and IndusInd Bank continue to trade be in the green.
- Kotak Mahindra Bank leads the pack after Uday Kotak announced that he's selling 2.83% of his stake in the bank.
- India's largest bank, the State Bank of India (SBI), reported flat gains with RBL Bank and Bank of Baroda trading in the red.
Kotak Mahindra Bank continues to be the top gainer on the stock market followed by Bandhan Bank, IndusInd Bank and Axis Bank.
However, the light is no longer as bright for three entities, including India’s largest bank, the State Bank of India (SBI). SBI’s share price, along with RBL Bank and Bank of Baroda. SBI ended the day with flat growth with the former two trading in the red despite yesterday’s surge.
|Bank||Stock price change (%)|
|Kotak Mahindra Bank||7.57|
|IDFC First Bank||0.85|
|Bank of Baroda||-1.18|
Refinancing pivots Kotak Mahindra Bank in the lead
Before Uday Kotak decided to sell nearly 3% of his take in Kotak Mahindra Bank, it had already announced a qualified institutional placement (QIP) of ₹7,000 crore. This allowed the private lender to raise capital from domestic markets without the need to submit a pre-issue filing with the Securities and Exchange Board of India (SEBI).
Despite filing an appeal with the regulator to allow Asia’s richest banker to retain his stake amid the coronavirus pandemic, he is selling his stake to meet the Reserve Bank of India (RBI) mandate of 26%.
"Uday Suresh Kotak will sell 56 million equity shares or 2.83% of equity of bank through the block deal. After the dilution, his personal holding will come down to 26.1% from 28.93% now," as per the term sheet.
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