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Mahindra & Mahindra acquires 3.53% stake in RBL Bank for Rs 417 crore

Jul 27, 2023

By: BlinkX Research Team

On July 26, Mahindra & Mahindra (M&M) officially confirmed its acquisition of a 3.53 percent stake in RBL Bank, a private lender, for Rs 417 crore. The investment was made as part of M&M's strategic investment plan and was disclosed in a regulatory filing.

M&M expressed its interest in further investment in RBL Bank, contingent upon pricing, regulatory approvals, and necessary procedures. However, the company clarified that its total stake would not exceed 9.9 percent under any circumstances.

Interestingly, M&M's name did not appear in the bank's June shareholding report, indicating that the acquisition was a recent development.

It's worth noting that Mahindra Group typically channels its investments in the financial services sector through its subsidiary, Mahindra & Mahindra Financial Services.

In the recent past, RBL Bank faced challenges, with its MD & CEO, Vishwavir Ahuja, stepping down in December 2021 as the Reserve Bank of India (RBI) did not extend his term. During the same month, the RBI appointed its own official to the bank's board.

By acquiring a stake in RBL Bank, M&M is signaling its interest in the financial sector and exploring potential opportunities for growth and diversification in the banking industry. The investment aligns with M&M's strategic vision and may open doors for further collaboration between the two entities in the future. However, as M&M keeps its stake below the 9.9 percent threshold, the bank's governance and operations are not expected to be significantly impacted by the acquisition.

Content source: Media reports