ING sells part of Kotak Bank stake to raise up to Rs 3,654 crore
Kotak Mahindra acquired ING’s banking business in India in an allstock transaction in November 2014 in what still is the largest bank acquisition in India.
A term sheet released on Wednesday said the bank could sell up to 2.54% stake out of the total 6.42% it holds in Kotak in a block trade, which opened on Wednesday evening and will close early morning on Thursday.
The sale is part of the stake monetisation plan by the Dutch lender, the term sheet said. A Kotak spokesperson declined comment.
Kotak Mahindra acquired ING’s banking business in India in an all stock transaction in November 2014 in what still is the largest bank acquisition in India.
The acquisition came into effect from April 2015 and ING had a one year lock in for its stake in the Indian lender, which ended in April this year.
“ING’s sale is not a surprise given the capital constraints they face in their home market. Though the returns that they make on their equity in India right now cannot be matched in their home market, ING has taken a call to conserve capital,” said Ashwin Parekh, a banking consultant.
ING will sell a minimum of 2.55 crore shares, or 1.39% stake, in Kotak Mahindra Bank in the secondary market. However, the sale could increase to 4.67 crore share, or 2.54%, of Kotak’s equity, the term sheet said.
Kotak shares ended at Rs 782.50, down 0.25%, at the NSE on Wednesday. At this price, ING will make between $300 million (Rs 1,993 crore) and $550 million (Rs 3,654 crore) on the sale. Kotak Securities is the sole broker.