The shares of India’s fourth largest private sector bank by assets gained 2 percent to Rs 1,758.65 a share after a Switzerland-based Insurance Company entered into a definitive agreement to acquire a 51 percent stake in Kotak General Insurance.
On Thursday, Kotak Mahindra Bank Ltd shares closed at Rs 1,737 a share on the National Stock Exchange, up Rs 13.30 or 0.77 percent from the previous close price. The company is valued at Rs 3,45,373 crore on the stock exchange.
According to the company’s filing, Kotak Mahindra Bank Limited and Kotak Mahindra General Insurance Company Limited (“Kotak General Insurance”) have entered into definitive agreements for a transaction with Zurich Insurance Company Limited of Switzerland.
Zurich will invest approximately Rs. 4,051 crore to acquire a 51 percent stake in Kotak General Insurance through a combination of new growth capital and share purchase and will acquire an additional 19 percent stake within three years of its initial acquisition.
Zurich, headquartered in Switzerland, is a wholly-owned subsidiary of Zurich Insurance Group Limited, a leading multi-line insurer with operations in over 200 countries and territories.
For the fiscal year ended March 31, 2023, Kotak Mahindra General Insurance Company Limited reported a net worth of Rs 341.07 crore and a turnover of Rs 1,148.30 crore.
The Bank’s interest earned has increased by 37 percent yearly, from Rs 9,993 crore in Q2FY23 to Rs 13,716 crore in Q2FY24. In the same time frame, the company’s net profit increased by 19 percent, from Rs 3,579 crore to Rs 4,422 crore.
In the recent financial year, the company reported a return on equity of 13.34 percent and a return on capital employed of 3.41 percent.
The company promoters hold 25.93 percent of the company as of a recent shareholding pattern, while Foreign institutional investors hold 40.97 percent and retail investors have a 13.08 percent stake.
Kotak Mahindra Bank is a diversified financial services group that provides retail banking, treasury and corporate banking, investment banking, stock brokerage, vehicle finance, advisory services, asset management, life insurance, and general insurance.
Written by Omkar Chitnis
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