Reportedly a company affiliated with the Mahindra Group has made a move by acquiring around 4% ownership, in RBL Bank through trades on the market. It appears that they are keen on expanding their stake to a range of 15 25%. Despite facing limitations the Group may pursue approval to become a notable shareholder. RBL Bank is currently under scrutiny due to changes in its leadership and investors are actively looking for a resolution, in the long run.
According to reliable sources, a Mahindra Group entity has apparently acquired around a 4% stake in RBL Bank through open market trades. It seems the Mahindra Group is interested in further increasing its stake in RBL Bank, potentially aiming for a significant 15-25% ownership if it secures the necessary approvals to become a strategic shareholder. The group appears enthusiastic about the potential synergies between RBL Bank and its various entities.
However, there are certain regulatory restrictions to consider. As per current RBI rules, industrial houses are permitted to hold a maximum stake of 10% in banks but cannot act as promoters. Despite this limitation, there is a possibility that the Mahindra Group will seek special permission from the RBI, hoping for a dispensation. It is worth noting that the RBI strictly prohibits granting banking licenses to industrial houses.
The Mahindra Group has primarily invested in the financial services sector through its group company, Mahindra & Mahindra Financial Services.
Over the past few years, RBL Bank has faced some challenges. Vishwavir Ahuja had to step down as MD & CEO when the RBI did not extend his term. Subsequently, the RBI appointed its own official to RBL Bank’s board in December 2021. These developments brought the financial strength and asset quality of the private lender under scrutiny.
Members of the investor community believe that the regulator is actively seeking a long-term solution for RBL Bank. In August 2022, Gopal Jain and Sivakumar Gopalan were appointed as non-executive directors to contribute to this objective.
In terms of other investors, Barings Asia currently holds a 10% stake in the bank, while Gaja Capital and CDC are also involved. The Barings Asia-led consortium had invested in RBL Bank back in 2020.
As of the latest update, RBL Bank’s shares were trading at Rs 232.35 apiece on the NSE, showing a notable 4% increase from the previous close as of 12:44 PM.
