Shares of Kotak Mahindra Bank surged as much as 8 percent in morning trade on Tuesday to a high of Rs 1,348 apiece. According to BloombergQuint, 5.6 crore shares of the private lender exchanged hands in a single large deal on BSE that took place at Rs 1,249 per share.
Earlier on Monday, a PTI report citing sources said that Founder & CEO Uday Kotak will be selling 2.83 percent stake worth over Rs 6,800 crore in the lender on Tuesday.
The stake sale would help bring down his stake in the country's fourth largest private sector lender to the RBI-mandated 26 per cent. A source aware of the development told PTI that the stake dilution would be carried out through private placement by way of a block deal on 2 June.
The move would also bring the curtains down on a long standoff between the regulator and the bank over the issue, which saw Uday Kotak dragging the RBI to the Bombay High Court in December 2018.
Under the agreement, Kotak had reached with the RBI this January, he has time till 17 August 2020 to pare the promoters/promoter group stake. The price band for the share sale, as per the PTI report, had been fixed at Rs 1,215 to Rs 1,240 apiece which would fetch Rs 6,804 crore at the lower end of the price band and Rs 6,944 crore at the upper-end.