M&M set to exit RBL via $78-million block deal

Synopsis

Mahindra & Mahindra is set to exit RBL Bank by selling its entire 3.5% stake. The deal is valued at approximately $78 million. Kotak Securities is managing the transaction. The sale is scheduled for Thursday. This move represents a profitable exit for Mahindra, which had invested in the bank in July 2023.

Mahindra & Mahindra (M&M) is likely to sell its entire 3.5% stake in RBL Bank through a block deal worth about $78 million ( ₹691 crore), marking a complete exit from the private lender.

The sale is scheduled for Thursday with Kotak Securities acting as the sole broker for the transaction, according to people in the know.

The floor price for the sale has been set at ₹317 per share, or a 2.1% discount to RBL Bank’s last closing price of ₹323.8 on November 4 on NSE. The deal could involve sale of up to 21.2 million equity shares, totalling around 3.45% of the bank’s total outstanding equity.
M&M did not respond to email queries.

Analysts termed the transaction as a profitable exit for Mahindra. The conglomerate had invested ₹417 crore for the 3.5% stake in RBL Bank in July 2023. At current prices, the stake sale is expected to fetch more than 60% gain for Mahindra in just over two years.

ET Bureau

The block trade would be purely a secondary, clean-out sale without any lock-up period.

While acquiring the stake in 2023, Mahindra had said it may consider further investment in RBL subject to pricing and regulatory approvals. The eventual stake, however, would be less than 9.95%, it said at the time.

Emirates NBD Bank PJSC, the UAE’s second-largest bank, had last month agreed to put in ₹26,580 crore to acquire a majority stake in RBL Bank. The equity infusion will be through a preferential allotment of primary capital at ₹280 per share for a 60% stake.

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