Sumitomo Mitsui Banking Corp. (SMBC) plans to sell its stake in Kotak Mahindra Bank Limited (BSE:500247), likely to avoid any conflict of interest after getting the regulatory nod to buy nearly 25% in Yes Bank. The foreign lender will sell up to 32.8 million shares or its entire 1.65% stake in Kotak Bank as of 30 June via a block deal, according to the term sheet accessed by Mint.
The floor price for the share sale has been set at INR 1,880, a discount of 4.1% to Kotak's closing price of INR 1,960.40 apiece on the National Stock Exchange on Tuesday. The share sale is expected to help SMBC garner at least INR 61,660 million. SMBC and Kotak Bank declined to comment on Mint's queries.
The Japanese lender is expected to use the proceeds from the Kotak share sale to buy a stake in Yes Bank, according to multiple media reports. Yes Bank said in May that SMBC's 20% stake purchase would be worth around INR 140,000 million in one of the largest cross-border deals in India's financial sector. In July, SMBC sought RBI's nod for an additional 4.9% stake purchase in the bank.
SMBC will acquire a 13.19% stake in Yes Bank from the State Bank of India and a cumulative 6.81% from Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank. Kotak held 1.21% of Yes Bank as of June.
