RBL Bank Block Deal: Mahindra & Mahindra to Exit Entire Stake at 64% Return

Mahindra & Mahindra (M&M) is selling its entire 3.45% stake in RBL Bank through a block deal valued at around ₹682 crore, according to news reports. The sale marks the automaker’s complete exit from the private lender a little over a year after its initial investment.

Pricing and Market Details

The floor price for the block deal has been set at ₹317 per share, a discount of roughly 2.1% to RBL Bank’s current market price. The exit represents a significant profit for the Mumbai-based automaker. M&M had invested ₹417 crore in July 2023 to acquire the stake at ₹197 per share, resulting in an impressive 64% return.

Strategic Clarity from the Outset

M&M’s move is consistent with the stance it took shortly after the investment. In August 2023, the company’s Managing Director and CEO, Anish Shah, stated that M&M had no intention of increasing its stake in the bank.

“There is no intention of going further at this point. But it helps us understand the sector a lot better, to enhance the value of a business that has a market capitalisation of nearly ₹40,000 crore,” Shah had said at the time.

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The swift and profitable exit underscores M&M’s disciplined approach to capital deployment. The investment appears to have achieved its purpose, providing the automaker with a deeper understanding of the banking and financial services space. With the sale of its full holding, M&M concludes a short but financially rewarding engagement with RBL Bank.

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