Private equity players and corporate investors are reportedly eyeing stakes in Kolhapur-based Ratnakar Bank.
Elephant Capital, promoted by the Dabur Group, is keen on increasing its holding in the old generation private sector bank to 5% from the current 2.5%.
The HDFC Group is also understood to be interested in picking up stake in Ratnakar Bank, a source said.
Under existing norms no single individual or entity can buy more than 5% in an Indian bank without the approval of the Reserve Bank of India (RBI).
“We have already acquired 2.5% and we are looking to increase our stake,” Mohit Burman, director of Dabur, told Hindustan Times.
Ratnakar Bank’s existing shareholders include brokerage firm Centrum, which is believed to be holding close to 5%, and State Bank of Mauritius (about 4.8% stake) and Indocean Fund (about 1%).
Ratnakar Bank has a deposit base of Rs 1,600 crore.
If and when this stake sale happens, it could mark the first steps of consolidation in the Indian banking sector.
RBI is expected to open up the banking sector further, and old generation private sector banks would be the first to be gobbled up.
“Some of these banks are concentrated only in certain areas and naturally they would also want to expand. It would make sense for them to look for buyers or at least enter into joint ventures,” an industry expert said, adding that investments by PE funds would have an impact on the valuation of these banks.