Mahindra & Mahindra (M&M) officials had a meeting with RBL Bank executives on July 28 after the tech-to-tractor conglomerate picked up a 3.53 percent stake in the private sector lender for Rs 417 crore.
“We have acquired a 3.53 percent stake in RBL Bank as an investment at a cost of Rs 417 crore,” M&M confirmed in a regulatory filing, hours after Moneycontrol reported that a Mahindra Group entity had picked up nearly 4 percent stake in the bank.
M&M added that it may "consider further investment subject to pricing, regulatory approvals and required procedures". However, “in no circumstance will it exceed 9.9 percent”, the company clarified.
The Mahindra Group owns non-banking financial company Mahindra & Mahindra Financial.
Mahindra & Mahindra Financial Services on July 28 reported a consolidated net profit of Rs 362.22 crore for the quarter ended June 2023, registering a growth of 51.01 percent over Rs 239.86 crore profit reported a year back.
On July 28, Mahindra & Mahindra Financial shares opened at Rs 313.95 apiece on the BSE and closed at Rs 300.95.
An approval from the Reserve Bank of India (RBI) is mandatory for buying a 5 percent stake in any Indian lender, according to banking rules.
RBL Bank went through a rough patch through the last few years. Vishwavir Ahuja stepped down as MD and CEO in December 2021 after the central bank refused to extend his tenure and appointed a central bank official on the bank’s board.
Ahuja’s sudden departure and the subsequent action of the RBI had put the regulatory lens on the private lender's financial strength and asset quality. A source from the investor community told Moneycontrol, “We sense that the regulator is looking for a long-term solution for RBL Bank.”
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