Mahindra and Mahindra sells entire stake in RBL Bank for ₹678 crore

Mahindra and Mahindra (M&) sold entire stake in lender RBL Bank ₹678 crore, the automaker said in its stock exchange filing on Thursday, November 6. The sale comes just days after lender Emirates NBD announced plans to acquire a majority stake in RBL Bank, marking a major foreign investment in India’s banking sector.

The company acquired 3.53% shares of RBL Bank as a treasury investment in 2023, with a payment in 2023. ₹417 crore. On July 26, 2023, Mahindra and Mahindra, while informing the stock exchanges about the investment, noted that it would increase its stake subject to pricing, regulatory approvals and necessary procedures. Thursday’s sale resulted in a gain of 62.5%, according to M&M.

“We refer to our letter dated 26 July 2023, in which the Company informed that 3.53% shares of RBL Bank were purchased for Rs 417 Million as treasury investment. In addition to the above, we would like to inform you that the Company today sold its entire shares in RBL Bank for Rs 678 Million, which represents a 62.5% gain on investment.” M&M’s last swap file has been read.

Mahindra and Mahindra share price

M&M shares up 1.44% ₹3,633 per person at around 10:12 a.m. on Thursday, November 6. The auto giant made the announcement during market trading hours on Thursday, November 6. M&M share price ₹3,603.45 per share on BSE on Thursday.

Meanwhile, RBL Bank shares increased by 0.54% ₹325.75 per person after the announcement. Lender’s share price at open ₹326.15 per share on BSE.

RBL Bank’s acquisition of Emirates NBD

M&M’s latest move comes just days after the lender reported in its quarterly earnings call that Emirates NBD plans to acquire a majority stake in RBL Bank for $3 billion or thereabouts. ₹26,850 crore, marking the largest ever FDI and equity fund raising in the Indian banking sector. RBL Bank made the announcement months after the RBI gave in-principle approval to the Dubai bank to set up a wholly owned subsidiary in India.

Based on regulatory and other approvals, Emirates NBD will be designated as the local bank’s promoter upon completion of the transaction. Accordingly, the bank will also have the right to appoint managers to the board of directors.