Last week, the much-discussed topic of corporate entry into banking gained prominence after Mahindra & Mahindra (M&M) picked up 3.53% stake in private lender RBL Bank. The bank’s shares soared, hitting a fresh 52-week high on July 27, a day after M&M informed the exchanges about the stake purchase for INR417 crore. “We may consider further investments, subject to pricing, regulatory approvals and required procedures. However, in no
Business News›Prime›Markets›M&M’s tryst with banking puts focus on RBL Bank. But investors must prepare for a long journey.
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M&M’s tryst with banking puts focus on RBL Bank. But investors must prepare for a long journey.
Synopsis
Shares of RBL Bank hit fresh highs but M&M’s plunged post the announcement of the automaker buying a 3.53% stake in the former. While analysts feel RBL Bank is a good long-term investment, for M&M hiking stake to 9.99% won’t be easy. Would M&M have been better off giving that money out as dividend or doing a share buyback?
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