Bharti Enterprises is getting Airtel Payments Bank shares worth Rs 294 crores from the Kotak Mahindra Bank. Airtel Payments Bank Limited (APBL) is the finance arm of Bharti Airtel. The Kotak Mahindra Bank is selling its 20 crore shares in the APBL to Bharti Enterprises for a cash consideration of Rs 294 crore.
Kotak Mahindra Bank will be selling its 8.57% stake in the Airtel Payments Bank Limited (APBL) to Bharti Enterprises. These shares were purchased by the bank in the year 2016 and 2017 for Rs 200 crore. According to a PTI report, in a regulatory filing, the bank has said it expects the deal to be completed by September 15, 2021, or before.
As per the report, there has been no objection noted by Bharti Enterprises against the bank for making the proposed transaction. Thus it looks like the company is more than ready to purchase its shares back from the bank.
The Kotak Mahindra Bank has further said that it doesn’t require any regulatory approval from the Reserve Bank of India (RBI) or any government institution for going ahead with the proposed transaction.
Airtel Payments Bank Had Just Reached Break-Even Point
It is a strange time for the Kotak Mahindra Bank to exit from the Airtel Payments Bank since it had just reached the break-even point after 55 months. There could be huge profits lurking for the investors of Airtel Payments Bank in the future because the banking arm of Bharti Enterprises has already reached the break-even point.
This might be the reason why the telco has not shown any objection until now as well. APBL was incorporated in India on April 1, 2010, but Airtel Payments Bank only started providing services on November 23, 2016. Airtel Payments Bank had reported a turnover of Rs 627.19 crore in FY20. This might be another boost for Airtel’s stock which is already going high.