Kotak Mahindra Bank shares rally 8%

Shares of Kotak Mahindra Bank on Tuesday gained 8 per cent as Uday Kotak will be selling 2.83 per cent stake worth over Rs 6,800 crore in the lender.

On the BSE, the stock opened on a strong note and further jumped 7.88 per cent to Rs 1,347.75.

The stock rose by 7.97 per cent to Rs 1,348 on the NSE.

Kotak Bank was the top gainer among the Sensex and Nifty components during the early trade.

Billionaire banker Uday Kotak, who has had a long run-in with the Reserve Bank over his excess personal holding in Kotak Mahindra Bank, will be selling 2.83 per cent stake worth over Rs 6,800 crore in the lender on Tuesday.

The stake sale would help bring down his stake in the country's fourth-largest private sector lender to the RBI-mandated 26 per cent.

A source aware of the development told PTI that the stake dilution would be carried out through private placement by way of a block deal on June 2.

"Uday Suresh Kotak will sell 56 million equity shares or 2.83 per cent of equity of bank through the block deal. After the dilution, his personal holding will come down to 26.1 per cent from 28.93 per cent now," as per the term sheet.