Banking Tycoon Cuts Kotak Stake Through Sale to Canada Funds

(Bloomberg) -- Canadian pension fund manager Caisse de Depot et Placement du Quebec bought a stake in Kotak Mahindra Bank Ltd., as India’s richest banker offloaded a part of his holdings to comply with rules.

Billionaire Uday Kotak sold 27.6 million shares, or 1.5 percent stake, in the lender on Wednesday at 817 rupees apiece, according to BSE data released after the market closed. Caisse de Depot bought 18.4 million shares and Canada Pension Plan Investment Board bought 9.2 million shares of Kotak Mahindra, which is India’s fourth-largest private-sector lender by assets.

The sale would help Kotak move toward compliance with a central bank directive to cut his ownership in the lender to 30 percent by the end of June. The tycoon and related parties held a 33.6 percent stake in Kotak Mahindra Bank before the transaction.

Shares of Kotak Mahindra Bank rose 1 percent on Wednesday to a record 824.90 rupees at the 3:30 p.m. close in Mumbai, giving the lender a market value of about $23 billion. The benchmark S&P BSE Sensex dropped 0.3 percent. Kotak, who started the lender in 2003, will have to trim the stake to 20 percent by the end of 2018 and 15 percent by the end of March 2020, according to a February exchange filing.

Kotak is worth $8.2 billion, making him India’s eighth-richest person, according to the Bloomberg Billionaires Index.

To contact the reporters on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net, Anto Antony in Mumbai at aantony1@bloomberg.net, Scott Deveau in Toronto at sdeveau2@bloomberg.net.

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Marcus Wright at mwright115@bloomberg.net, Elizabeth Fournier at efournier5@bloomberg.net, Russell Ward