In yet another instance of a large European bank selling shares of an Indian lender, Dutch major ING has exited its investment in Kotak Mahindra Bank by selling its entire 3.07% stake through a bulk deal at NSE for Rs 801.3 crore ($172.5 million). As per VCCircle estimates, ING took a haircut of 17% on its two-and-half-year-old investment (excluding dividend earnings on the shares).
Early this week, Rabobank reduced its stake in Yes Bank by selling 11% of the firm to a group of domestic and foreign institutional investors for an estimated Rs 990-1,000 crore ($ 210 million), that paved the way for an imminent entry of the Dutch lender into retail banking business in India. ING already operates the ING Vysya Bank in the country.
ING Bank NV Singapore Branch had originally bought around 2.5% stake in Kotak Mahindra in October 2007 through a qualified institutional placement. The deal was struck at around Rs 950 per share and ING put in around Rs 812 crore.
Other investors who participated in the QIP include Credit Agricole, State Bank of India, Blackrock Funds and Soros. Citigroup and Kotak Investment Banking were the joint global co-ordinators and book running lead managers for the offering.
ING bought more shares, apparently to average out, in the next two quarters. It invested somewhere around Rs 5 crore in the January-March 2008 period (when markets crashed) and went on to buy more shares worth around Rs 145 crore or more in the Mar-Jun’08 period.
Kotak Mahindra Bank is one of the new age private sector lenders in the country. It converted from a non banking finance company in 2003 to a bank. The group also has a strong investment banking business that was previously through a joint venture with Goldman Sachs. Besides these, it is also present in asset management, private equity, life insurance, broking among other businesses.