Mahindra Sells Entire RBL Bank Stake for Rs 6.78 Billion
M&M had acquired a 3.53 per cent stake in RBL Bank in 2023 as a treasury investment for Rs 4.17 billion. At the time, the company had informed the exchanges on 26 July 2023, noting that it could increase its stake depending on pricing, regulatory clearances, and other formalities.
According to Thursday’s filing, the exit generated a 62.5 per cent return for M&M. The company stated:
“We refer to our letter dated 26 July 2023, wherein the company had informed about the acquisition of a 3.53 per cent stake in RBL Bank as a treasury investment at a cost of Rs 4.17 billion. In furtherance to the above, we would like to inform you that the company has today sold its entire stake in RBL Bank for a consideration of Rs 6.78 billion, representing a 62.5 per cent gain on the investment.”
Following the announcement, M&M shares rose 1.44 per cent to Rs 3,633 apiece at around 10:12 am on the BSE. The stock had opened at Rs 3,603.45 per share earlier in the day.
Meanwhile, RBL Bank’s shares edged up 0.54 per cent to Rs 325.75, after opening at Rs 326.15 per share on the BSE.
The move comes shortly after RBL Bank revealed that Emirates NBD, the largest bank in Dubai, would acquire a majority stake for USD 3 billion (approximately Rs 268.5 billion). This represents the largest-ever foreign direct investment (FDI) and equity fundraise in the Indian banking industry.
RBL Bank’s announcement followed the Reserve Bank of India’s in-principle approval for Emirates NBD to establish a wholly owned subsidiary in India. Upon completion of the transaction, Emirates NBD will become the promoter of RBL Bank and will gain the right to nominate directors to the bank’s board.
M&M’s divestment marks a profitable exit from its strategic treasury investment, coinciding with a phase of heightened activity and foreign participation in India’s financial services sector.