Mumbai: Shares of Kotak Mahindra Bank Ltd on Friday erased half of their gains after the bank clarified to stock exchanges that it was unaware of any plans by Warren Buffett’s Berkshire Hathaway Inc. to buy a stake. Earlier, CNBC TV reported that Berkshire Hathaway was planning to buy a 10% stake in Kotak Mahindra Bank. The stock surged as much as 13.87%, its biggest jump since May 2009, to hit a high of ₹ 1,345.35 a share.
The stock ended the day at 8.53% higher at ₹ 1,282.25 apiece on the BSE while the benchmark Sensex gained 1.02% to end the day at 35,673.25 points.
“We confirm that we have nothing to report to the exchanges on the said item. Kotak Mahindra Bank is unaware of any plans by Berkshire Hathaway to buy a stake in the bank as stated in the story," the bank said in a notice to the BSE.
The RBI had mandated Kotak Bank to reduce its promoter shareholding to 20% of its paid-up capital by 31 December 2018, and 15% by 31 March 2020. Uday Kotak, vice chairman and managing director of Kotak Mahindra Bank, holds a 30.03% stake in the bank.
In August, the RBI rejected Kotak Bank’s proposal to issue non-convertible preference shares to reduce the promoter holding. Earlier, Kotak Bank had said it was planning to raise as much as ₹ 500 crore by issuing non-convertible perpetual non-cumulative preference shares to dilute the promoter shareholding.
Investors are looking closely at the shares of Kotak Bank since October, after the RBI cracked the whip on Bandhan Bank for failing to follow promoter shareholding norms. The RBI barred Bandhan Bank from opening branches without its approval and ordered the freezing of the salary of its CEO Chandra Shekhar Ghosh.