Kotak Mahindra Bank's move to cut promoter shareholding to below 20% by issuing Rs 500 crore of perpetual preference shares is seen to be positive for the bank, analysts said. Late on Thursday, Kotak Mahindra Bank said it approved the allocation of 100 crore of perpetual preference shares to eligible investors. After the issue, the paid-up capital of the bank increased to Rs 1,453.16 crore from Rs 935 crore, and the promoter shareholding holding fell to 19.7% of the paid-up capital of the bank from around 30% earlier, the bank said in a notice to the stock exchanges. Banking sector analysts said the issuance of the preference shares will remove any major equity dilution overhang on the stock in the near-term. \u201cWe perceive this as an innovative structure, with no voting rights attached, of shareholding dilution sans financial implications,\u201d said an analyst who did not want to be quoted. The move to reduce the promoter shareholding is in line with the Reserve Bank of India\u2019s directive asking the promoters, led by billionaire Uday Kotak, to bring down their stake in the bank to 20% by December 2018 and to 15% by March 2020. The preference shares have been issued through private placement. The promoters\u2019 position in terms of voting rights will remain unchanged even after the issuance of the preference shares because banking laws cap voting rights at 15%, irrespective of shareholding. Jaimin Bhatt, president and group chief financial officer at Kotak Mahindra Bank, said the bank will be required to pay dividend on these shares only if the bank makes a profit. \u201cThis is non-cumulative preference share. So, if there is no profit, there is no dividend,\u201d Bhatt told a television news channel.