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Kotak Mahindra Bank shares fall for three sessions in a row

LiveMint logoLiveMint 29-03-2017 Ravindra N. Sonavane

Mumbai: Shares of Kotak Mahindra Bank Ltd was trading lower for the third consecutive session as investor turned cautious ahead of its press conference on Wednesday after 3.15pm.

According to news reports, the bank could announce a big acquisition in order to reduce its promoter Uday Kotak’s stake in the bank. The authorities may announce a merger with Axis Bank or an acquisition of Mahindra & Mahindra Financial Services or other non banking finance company.

At 10.30am, Kotak Mahindra Bank was trading at Rs854.80 on BSE, down 0.59% from previous close. In last three sessions it fell 2.7% and so far this year it gained 19%. Axis Bank Ltd rose 1.1% to Rs508.70 a share.

Mahindra & Mahindra Financial Services Ltd gained 10 out of 12 trading sessions and rose 20.5% during this period. The scrip was trading at Rs 331.60 on BSE, up 0.7%. Bharat Financial Inclusion Ltd rose 0.2% to Rs 836.25.

On Monday, the bank said in a notice to exchanges that its board will meet on Thursday to consider raising funds through various options.

In a notice to BSE, the bank said, “.. to consider raising of equity capital by the Bank through rights issue, private placement, follow-on Public Offering (’FPO’), Qualified Institutions Placement (’QIP’), Global Depository Receipts (’GDR’), American Depository Receipts (’ADR’) or through any other permissible mode or a combination thereof, as may be considered appropriate, subject to shareholder approvals as applicable and regulatory/statutory approvals and requirements.”

For the December quarter, Kotak Mahindra Bank reported a net profit of Rs1,249.94 crore, up 33% from a year earlier, while its advances rose 12% from a year ago to Rs1.29 trillion.

Also, Kotak Mahindra is actively looking to reduce its promoter stake to 30% by June quarter from 33.61% as of December quarter as mandated by the Reserve Bank of India.

Earlier, its promoter sold 1.5% stake in the bank to two Canadian pension funds for around Rs2,255 crore via open market transactions

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