Mahindra RBL Bank Block Deal: There was a sudden stir in the stock market on Thursday morning when RBL Bank shares jumped by 2.5% to reach a high of ₹332. There was talk among investors that automobile giant Mahindra & Mahindra (M&M) has sold its entire 3.45% stake in the bank through a block deal. The total value of this deal is said to be around ₹678 crore. This exit of Mahindra is shocking because the company had made this investment just a year ago, in July 2023.

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64% profit in a year, then why did Mahindra come out?

According to the information, during the block deal, 2.11 crore shares were sold at a price of approximately ₹ 321 per share. Mahindra had bought the same shares last year at the rate of ₹ 197 per share, which means a profit of about 64% in one year. But the question arises, when there were such excellent returns on investment, then what was the reason for the sudden exit?

The company management had already made it clear that this investment has been made only to increase the understanding of the sector and not with the intention of taking a long stake. M&M MD and CEO Anish Shah had said in August 2023, “This stake will help us understand the functioning of the banking sector, but there are no plans to increase the stake further.”

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Emirates NBD’s entry game, the big story behind the deal

This sale of Mahindra happened at a time when RBL Bank has recently approved a big investment by Emirates NBD Bank PJSC. This UAE-based bank has agreed to invest up to ₹26,853 crore ($3 billion) for a 60% stake at the rate of ₹280 per share.

Market experts believe that Mahindra’s exit just before this strategic investment was a timing move, i.e. exit after booking profits.

Hint for investors, is there still a chance? (Mahindra RBL Bank Block Deal)

Even though Mahindra may have taken a step back, RBL Bank shares are continuously showing strength. The stock has risen 63% in the last six months and has doubled since the beginning of the year.

Emirates NBD’s investment has instilled new confidence in the market that the bank will soon enter the next phase of growth. According to market experts, “Mahindra’s departure is perhaps just the beginning of a new story for banks.”

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