Uday Kotak is reducing stake in Kotak Mahindra Bank by 10%; here’s why

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Published: August 3, 2018 11:34:23 AM

Following the issuance of perpetual preference shares on Thursday, the promoter stake of Uday Kotak, MD & CEO of Kotak Mahindra Bank, will be reduced to 30 percent from 20 percent.

Following the issuance of perpetual preference shares on Thursday, the promoter stake of Uday Kotak, MD & CEO of Kotak Mahindra Bank, will be reduced to nearly 20 percent from the existing 30 percent to meet the RBI mandate on shareholding.  His stake now stands at 19.7 percent after the bank issued investors preference shares worth Rs 5 billion. Uday Kotak held 30.03 percent in the bank before the preference shares were issued. On Thursday, 1 billion of non-convertible perpetual non-cumulative preference shares (PNCPS) of a face value of Rs 5 each were issued.

“Subsequent to this issue of Rs. 500 crores of PNCPS, the paid-up capital of the Bank has increased from Rs.953.16cr to Rs.1,453.16cr. Post this issuance of PNCPS, promoter holding is 19.70% of the paid-up capital. This meets the RBI’s communications in this behalf for December 31, 2018,” bank said in an exchange filing.

The central bank had asked the private lenders to cut promoter holding to 20 percent of paid-up capital by December 31, 2018, and 15 percent by March 31, 2020. The Kotak Mahindra shares were trading at Rs 1290.75 up 0.76 percent on BSE today at the time of reporting.

Meanwhile, Kotak Mahindra Bank reported 12.29 per cent rise in standalone net profit at Rs 1,024.94 crore for April-June, 2018-19. The bank’s net profit stood at Rs 912.73 crore in the corresponding period of 2017-18. Total income during the quarter stood at Rs 6,644.29 crore, up 19.44 per cent from the year-ago period, Kotak Mahindra Bank said in a regulatory filing.

Gross non-performing assets (NPAs) reduced to 2.17 per cent of gross advances as of June quarter 2018-19 from 2.58 percent in the same period last year. Net NPAs also came down to 0.86 percent of net advances from 1.25 per cent in the year-ago period.

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