Kotak India pulls £100m City share placing

KOTAK Mahindra, an Indian financial services group, was yesterday forced to abandon a £100m London share placing and offer after failing to satisfy the rules over having a sufficiently free float.

Kotak adviser Investec said there was demand for around £40m worth of shares in Kotak’s Infrastructure Fund – below the maximum amount but above the minimum required by the company – that would have invested in companies focused on infrastructure sectors in India.

But Kotak faced a major problem in that London regulators insist there is a free float of 25 per cent of the shares in issue, which has to be made up of shareholders owning five per cent or less of the stock who are also unconnected to the company.

Sources close to the deal said they would “consider all options” including a relaunch on the main market. There was also a chance the group might set up a private fund or an open platform fund, sources said.