Kotak Mahindra Bank stock jumps over 10% on report of Berkshire investment

Kotak Mahindra Bank stock jumps over 10% on report of Berkshire investment

Earlier in the day, Kotak Bank shares posted their sharpest surge in almost nine years on Friday following a CNBCTV18 report that billionaire investor Warren Buffett's Berkshire Hathaway Inc is planning to pick up a 10 percent stake in the bank. "Kotak Mahindra is unaware of any plans by Berkshire Hathaway buying stake in the bank as stated in the story", the bank said in a BSE filing.

Private sector lender Kotak Mahindra Bank on Friday informed the exchanges that it had not considered any proposal to sell stake in the bank to Berkshire Hathaway.

Kotak Mahindra Bank said it was unaware of any plans by Berkshire Hathaway to buy a stake in the lender.

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"While Uday Kotak may not want to take out his money from the bank, the bank is over-capitalized". However, the nonconvertible perpetual noncumulative preference shares (PNCPS) are not a part of the common equity stock held by a bank according to Basel III classification, which means the selling these would not mean a dilution in control, as the RBI ruled.

The stock gained 33 percent in the past 12 months compared to an 8.3 percent gain in the S&P BSE Sensex, according to Bloomberg data.

Earlier this year, Berkshire Hathaway forayed into India's digital payments space by taking a 25-billion-rupee stake in the parent of Paytm.

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