Kotak Mahindra Bank share price hit its all-time high today after Reserve bank of India cleared the private sector lender's plan for dilution of promoters' shareholding. Share price of Kotak Mahindra Bank rose up to 2.89% to Rs 1,739.95 compared to the previous close of Rs 1,691.05 on BSE. Kotak Mahindra Bank stock has gained 33.83% in the last one year and gained 1.54% since the beginning of this year.
The large cap stock is trading higher than its 5 day, 20 day, 50 day, 100 day and 200 day moving averages. 19 of 38 brokerages rate the stock 'buy' or 'outperform', 13 'hold', four 'underperform' and two 'sell', according to analysts' recommendations tracked by Reuters.
"Further to our intimation dated 30 January, 2020, please note that the Reserve Bank of India has granted its final approval vide its letter dated 18 February, 2020 in the matter relating to dilution of promoters' shareholding in the Bank," the lender said in a communication to BSE.
This marks the end of 13-month old dispute after RBI had asked bank's MD and executive chairman Uday Kotak to pare his stake to 15% as part licensing guidelines.
On January 30, the bank said RBI had agreed to its plan to cut promoter stake to 26% from the current 29.96% over the next six months.
The bank also said promoters' voting rights will be limited to 20% of the paid-up voting share capital until March 31 and will be further capped at 15%, effective April 1.
With the settlement of dispute between the banking regulator and the private sector lender, Kotak Bank has decided to withdraw the writ petition submitted in the Bombay High Court opposing striking down of its proposal to issue perpetual non-convertible preference shares to comply with promoter shareholding norms.
Written by Aseem Thapliyal