Canada pen­sion fund buys stake in Ko­tak Mahin­dra Bank

The Pak Banker - - COMPANIES/BOSS -

MUM­BAI: Ja­pan's Su­mit­omo Mit­sui Bank­ing Corp. on Tues­day sold a large part of the Ko­tak Mahin­dra Bank Ltd stake to Canada Pen­sion Plan In­vest­ment Board (CPPIB), which man­ages 268.6 bil­lion Cana­dian dol­lars ($203.09 bil­lion) in pen­sion fund as­sets, ac­cord­ing to two peo­ple aware of the de­vel­op­ment.

On Mon­day, Mint re­ported that Su­mit­omo was look­ing to sell al­most half of its stake in the pri­vate sec­tor len­der for around $300 mil­lion (ap­prox­i­mately Rs.2,050 crore). As of 31 De­cem­ber, Su­mit­omo held a 3.58% stake in the pri­vate­sec­tor len­der, while CPPIB held about 3.91%, data from stock ex­changes show.

"The book was opened last evening. CPPIB has bought the largest chunk of shares on of­fer. Some for­eign in­sti­tu­tional in­vestors have also picked up stakes," said one of the per­sons men­tioned above, re­quest­ing anonymity. Do­mes­tic in­sti­tu­tions did not par­tic­i­pate in the share sale, he added.

Shares were of­fered to buy­ers in the price range of Rs.611.34-636.55 apiece, ac­cord­ing to Bloomberg.

Cit­i­group Inc. is man­ag­ing the share sale pro­gramme. Af­ter the trans­ac­tion, Su­mit­omo's stake in the bank will fall to around 1.79%. The Ja­panese bank had picked up a 4.5% stake in Ko­tak Mahin­dra Bank in 2010 through a pref­er­en­tial al­lot­ment for Rs.1,366 crore.

Apart from its in­vest­ment in Ko­tak Mahin­dra Bank, CPPIB has in­vested in in­fra­struc­ture, real es­tate and pri­vate equity in­dus­tries in In­dia. CPPIB's ex­po­sure to the In­dian in­fra­struc­ture sec­tor is through a Rs.2,000 crore in­vest­ment in L&T In­fra­struc­ture De­vel­op­ment Projects Ltd ( L&T IDPL), which was an­nounced in De­cem­ber 2014.

In real es­tate, the pen­sion fund has part­nered with the Shapoorji Pal­lonji Group and Pi­ra­mal En­ter­prises Ltd. Apart from in­vest­ing through part­ner­ships, the pen­sion fund also backs do­mes­tic pri­vate equity funds in its ca­pac­ity as a lim­ited part­ner (LP). CPPIB has till date com­mit­ted $300 mil­lion to Renuka Ram­nath-led Mullti­ples Al­ter­nate As­set Man­age­ment Pvt. Ltd across its two funds. It has also com­mit­ted $75 mil­lion to In­dia Value Fund Ad­vi­sors. At 11.25am, shares of Ko­tak Mahin­dra Bank were trad­ing at Rs.632.5 on the BSE, up by 0.36%, while the bench­mark Sen­sex was trad­ing at 23,511.96 points, up by 2.22%. -

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