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M&M picks up 3.5% stake in RBL Bank for ₹417cr
July 27, 2023
Diversified business conglomerate Mahindra and Mahindra (M&M) has picked up a 3.53 per cent stake in private sector lender RBL Bank for ₹417 crore.
“We may consider further investment, subject to pricing, regulatory approvals, and required procedures. However, in no circumstance will it exceed 9.9 percent,” M&M said in an exchange notification on Wednesday.
Shares of RBL Bank jumped 7.1 percent to settle at ₹238.8 apiece on the BSE on Wednesday, close to their 52-week high of Rs. 242.1.
The Reserve Bank of India’s (RBI’s) norms cap non-promoter shareholding, (except supranational institutions, public sector undertaking, or government) either natural persons or non-financial institutions, in a bank at 10 percent.
However, non-promoters need prior approval from the regulator to increase their stake to 5 percent or more. Moreover, business houses that have more than 40 percent of their income or revenue from non-financial activities are not allowed to become a bank.
The rationale behind M&M’s investment in RBL Bank is not known. An email sent to an M&M spokesperson in this regard did not elicit a response. RBL Bank, too, did not respond to queries on M&M’s move to acquire a stake in the bank.
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