M&M sells entire stake in RBL Bank for ₹768 crore, makes 62.5% gains on investment

Mahindra & Mahindra (M&M) announced that it has sold its entire stake in RBL Bank for ₹768 crore. The automaker had acquired 3.53% of the bank's stake in 2023 for ₹417 crore. After the sale of the stake, M&M made a gain of 62.5% on the investment in a span of two years.

"We refer to our letter dated July 26, 2023, wherein the company had informed about the acquisition of a 3.53% stake in RBL Bank as a treasury investment at a cost of ₹417 crore. 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 ₹768 crore, representing a 62.5% gain on the investment," the statement read.

This move comes after RBL Bank announced that Emirates NBD would acquire a majority stake of 60% for ₹26,850 crore. The bank does not have an identifiable promoter, given its diverse public shareholding, which is largely distributed among mutual funds, insurance companies, and venture capital firms. Other major institutional investors include Quant Mutual Fund (6.64%), LIC (1.27%), Gaja Capital (1.32%), and Zerodha Broking (1.24%).

As per a recent exchange filing, RBL Bank provided a detailed announcement of the open offer for an additional 26% stake by the Dubai-based bank.

"Emirates NBD Bank (P.J.S.C.) (the ‘Acquirer’) has announced an open offer to acquire up to 415,586,443 fully paid-up equity shares of face value ₹10 each (‘Equity Shares’) from the public shareholders of the target company, representing 26% of the expanded voting share capital of the target company, at a price of ₹280.00 per equity share (the ‘Offer Price’), aggregating to a total consideration of ₹11,636.42 crore (assuming full acceptance), payable in cash," the statement dated November 4 read.

At the time of reporting, M&M’s shares rose 1.21%, trading at ₹3,624.70 apiece, whereas RBL Bank’s shares also grew by over a percent to hit an intraday high of ₹332 in Thursday’s trade.