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Shares of India's Kotak Mahindra Bank Ltd posted their sharpest surge in nearly nine years on Friday following a report that billionaire investor Warren Buffett's Berkshire Hathaway Inc is planning to pick up a 10 per cent stake in the bank.
US-based Berkshire Hathaway may invest between $4 billion and $6 billion in the lender by buying promoter stake or through a preferential allotment, CNBC-TV18 reported.
Uday Kotak, the billionaire head of Kotak Mahindra Bank, has been asked by the Reserve Bank of India to lower his holding in the bank to 20 per cent by the end of this year, and to 15 per cent by March 31, 2020.
In August, the Reserve Bank of India had said the CEO's plan to reduce his stake by issuing non-convertible perpetual non-cumulative preference shares does not meet their promoter holding dilution requirement.
Uday Kotak directly held a 29.73 per cent stake in the lender as of September 30, 2018, according to BSE data.
Kotak shares rose as much as 14 per cent to Rs 1,345.950, their highest since September 3. This was the stock's sharpest intraday gain since February 2010. The stock was the biggest contributor to gains on the NSE index, which was up 0.17 per cent as of 0629 GMT.
Kotak Mahindra Bank and Berkshire Hathaway were not immediately available to comment on the matter.
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