Life Insurance Corporation of India, a government-controlled insurance company that has the highest share of the market in India, can continue to increase its stake in private lender Kotak Mahindra Bank, having got the nod from Reserve Bank of India to increase its stake to 9.99%.
LIC has been increasing its stake in Kotak Mahindra Bank for several quarters.
According to its latest filing, the insurance major held around 4.96% of all outstanding shares in Kotak Mahindra Bank as of September 30 this year.
This was up from 4.38% just three months earlier, and 3.18% a year earlier.
Two years ago, LIC’s stake in Kotak Mahindra Bank was only 2.28%.
Other insurers too have been reducing their stake in Kotak Mahindra Bank over the last year.
Non-LIC insurers held around 1.75% stake in the bank as of September this year, down from 2.46% a year earlier.
Under Indian laws, financial service providers such as insurers must get prior permission from Reserve Bank of India to hold or increase their shareholding in other financial services providers such as banks.
Kotak Mahindra Bank is India’s third largest private sector bank by assets and by market capitalisation and has 1600 branches and 2519 ATMs.
Shares of the bank were up 3% today at Rs 2,024 on the NSE.