M&M wants to exit RBL in a $78 million block deal

Mahindra & Mahindra (M&M) is likely to sell its entire 3.5% stake in RBL Bank through a block deal worth around $78 million (₹691 crore), marking a complete exit from the private lender.The sale is scheduled for Thursday, with Kotak Securities acting as the sole broker for the transaction, insiders said.

The floor price for the sale has been set at ₹317 per share, or a 2.1% discount to RBL Bank’s last closing price of ₹323.8 on November 4 on NSE. The deal could include the sale of up to 21.2 million shares, representing about 3.45% of the bank’s total outstanding equity.
M&M did not respond to email queries.

Analysts called the transaction a profitable exit for Mahindra. The conglomerate had invested ₹417 crore in 3.5% stake in RBL Bank in July 2023. At current prices, the sale of the shares is expected to generate more than 60% profit for Mahindra in just over two years.

The block trade would merely be a secondary, clean-up sale without any lock-up period.

While acquiring the stake in 2023, Mahindra had said it may consider further investments in RBL, depending on pricing and regulatory approvals. However, the ultimate stake would be less than 9.95%, it was said at the time.

Emirates NBD Bank PJSC, the UAE’s second-largest bank, had last month agreed to invest ₹26,580 crore to acquire a majority stake in RBL Bank. The equity infusion will be through a preferential primary capital allotment of ₹280 per share for a 60% stake.