Shares of India's major private sector lender Kotak Mahindra Bank reversed gains Friday after the bank clarified on Berkshire Hathaway's stake buy report.
Shares of India’s major private sector lender Kotak Mahindra Bank reversed gains Friday after the bank clarified on Berkshire Hathaway’s stake buy report. Kotak Mahindra Bank has clarified that it is unaware of any plans by Berkshire Hathaway to buy a 10% stake in the company. Kotak Mahindra Bank said in a statement on the exchages that it has nothing to report to the exchanges on the news item that appeared on CNBC TV18.
Earlier, the channel had reported citing sources that Warren Buffett is eyeing a 10% stake in the bank. Berkshire Hathaway may look to invest $4-6 billion in Kotak Mahindra Bank, CNBC-TV18 said citing sources. Berkshire Hathaway may look at buying promoter stake via preferential allotment to invest in Kotak Mahindra Bank, CNBC-TV18 reported citing sources. The channel further reported the channel adding that it is awaiting response from Berkshire Hathaway. Kotak Mahindra Bank which had advanced 13% on the news to intra-day high of 1,345.95, slipped to about 1,240.80.
“Kotak Mahindra Bank Limited is unaware of any plans by Berkshire Hathaway buying stake in the Bank….”, said the private lender in an exchange filing.
Meanwhile, the RBI had earlier asked promoters of Kotak Mahindra Bank to bring down their stake to 20 percent by December 2018 and 15 percent by March 2020 in line with the guidelines for new bank licenses released four years ago. The RBI licensing guidelines for new private sector banks 2013, calls for promoter holding to be brought down in phases, first to 40 percent at the end of five years from the date of commencement of business operations.
Kotak Mahindra Bank is an Indian private sector bank headquartered in Mumbai, Maharashtra, India. In February 2003, Reserve Bank of India (RBI) issued the licence to Kotak Mahindra Finance Ltd., the group’s flagship company, to carry on banking business.