Uday Kotak sells less than 1% stake for Rs 1,687 crore in Kotak Mahindra Bank

Kotak Mahindra Bank's billionaire head Uday Kotak sold a less than 1 per cent stake in the lender in stock market transactions on Monday, complying with a central bank order to cut his holding.

The Reserve Bank of India asked Kotak to lower his holding in the bank to 30 per cent by end-June, 20 per cent by end-December next year, and to 15 per cent by March 31, 2020. On Monday, Kotak sold 18 million shares in the lender for Rs 16.87 billion ($261 million), lowering his ownership of the bank to 29.79 percent, according to a regulatory filing.

Kotak sold an about 1.5 per cent stake in the bank to Canada's two largest pension funds - Canada Pension Plan Investment Board (CPPIB) and Caisse de depot et placement du Quebec.

Earlier this month, the bank raised about $900 million by selling new shares to funds, diluting Kotak's holding further. Ahead of the deal on Monday, Kotak owned 30.74 percent of the lender. Shares in Kotak Mahindra Bank, which has the third-highest market capitalisation among India's banks, closed 0.4 percent higher at Rs 941.25 on Monday.

Recently, the bank raised over Rs 5,803 crore through a qualified institutional placement (QIP) issue to shed promoter Uday Kotak's stake, who is also the vice-chairman of the bank, as per advice of the RBI. The securities issuance committee of the board of the bank approved the issue price of Rs 936 apiece for 6.2 crore equity shares, as per a regulatory filing.