Moneycontrol Bureau
Shares of JM Financial touched a 31-month high to Rs 31.75 on Monday on reports that Azim Premji may buy additional five percent stake in the company. The stock rallied more than 10 percent in early trade.
Premji, Chairman and founder of leading IT firm Wipro, currently holds 2.9 percent stake as part of his individual investment portfolio in Nimesh Kampani-led JM Financial, one of the 25 aspirants eyeing banking foray.
Market sources said that the company may allot fresh shares amounting to up to five percent additional stake to the IT czar. While there was no official confirmation, sources said that the shares can be allotted at a significant premium to the current share price. The stake sale to Premji would also help JM Financial bring down its promoter shareholding, which eventually needs to be lowered to 51 percent to comply with public holding regulations related to setting up of a new bank.
Under the Reserve Bank of India (RBI) guidelines, promoter group would be permitted to set up a bank only through a wholly-owned Non-Operative Financial Holding Company (NOFHC). Further, the companies promoting the NOFHC should have at least 51 percent public shareholding.
At the end of September quarter, the stake of promoter and promoter group in JM Financial came down to 68.61 percent from 68.79 per cent while the public shareholding rose to 31.39 per cent from 31.21 percent.
The company earlier this year had roped in former Citigroup chief Vikram Pandit.
At 11:25 hours IST, the stock rose 8.67 percent to Rs 31.35 amid large volumes on the BSE.
(With inputs from PTI)
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