ING to offload its entire stake in Kotak Mahindra Bank

Dutch financial services group ING is selling its entire 3.1 per cent stake in India's Kotak Mahindra Bank to raise up to $173 million worth of shares in India's Kotak Mahindra Bank Ltd, various reports said on Wednesday.

The shares would be sold at Rs730 to Rs750 each. The deal represents 2 per cent of Kotak Mahindra's market value, and the seller has the option to upsize the deal to 3.1 per cent, a term sheet said.

The price represents a 4 per cent discount at the upper range of the band to Wednesday's closing price of Rs783.2.

The book-building for institutional investors has started, according to one report. An ING spokesman said that the company did not comment on market rumours. While Citibank is the sole adviser on the deal, officials at the bank in India could not be reached for comment.

On Tuesday, another Dutch lender, Rabobank moved a step closer to setting up its own banking unit in India as it cut its stake in mid-sized local lender Yes Bank for about $213 million. Citi is adviser on that deal too.

Standard Chartered, Credit Suisse and Citibank are expanding their services in India and Goldman Sachs has applied for a banking licence in the country, whose economy is forecast to grow more than 8 per cent this financial year.