M&M share price tanks after RBL Bank's clarification to Indian exchanges

Mahindra & Mahindra (M&M) share price has seen sell-off pressure since early morning deals today. M&M share price on July 27 opened with a downside gap and went on to hit an intraday low of ₹1,438.35 on NSE, logging around 7 percent within a few minutes of stock market's opening bell on Thursday.

Indian auto major had informed Indian bourses about buyingof 3.53 percent stake in the RBL Bank. But, some section of the media reported that M&M stake in RBL Bank has gone close to 5 percent. However, RBL immediately denied M&M stake going close to 5 percent and informed Indian bourses that as of 21st July 2023, M&M stake in RBL Bank stands at 3.53 per cent.

Why exchange sought clarification?

While replying to exchanges RBL Bank said, “We provide the point wise clarification as requested below: Presently, there are no negotiations/events which are required to be reported pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. The Bank is not aware of any information that has not been announced to the Exchanges which could explain the movement in the trading.”

"Considering that the Bank is not aware of any information as stated above, as of date this article does not have any material impact on the Bank," RBL Bank added.

RBL Bank said that that the holding of Mahindra & Mahindra Limited as per the last beneficiary position as on July 21, 2023 as received from the depository (NSDL) is 3.53 per cent of the total paid up share capital of the Bank.

RBL Bank informed Indian bourses about M&M stake as exchanges had sought clarification from the RBL Bank after news reports of M&M buying close to 5 per cent stake in RBL Bank. 

What M&M had claimed?

However, on Wednesday, Mahindra & Mahindra Limited had informed Indian bourses about 3.53 per cent stake buying in the private bank citing, "We have acquired a 3.53 % stake in RBL Bank as an investment at a cost of Rs. 417 Crores. We may consider further investment subject to pricing, regulatory approvals and required procedures. However, in no circumstance will it exceed 9.9%."