The European group has cut its shareholding in an India-based financial services business that includes wealth management in its range of services.

ING, the Netherlands-headquartered financial services group, has reduced its stake in India-based Kotak Mahindra Bank – a group that includes wealth management in its offering – to 3.9 per cent from the previous 6.4 per cent holding.

The European group sold 46.7 million ordinary shares of BSE-listed Kotak at a price of INR 782.32 per share, it said in a statement yesterday. Gross proceeds to ING from the offering amount to approximately €490 million ($550 million), at the current exchange rate. ING's remaining stake in Kotak will be subject to a 90 day lock-up following settlement of the transaction, which is expected to occur on 4 October.

The transaction will not have a material impact on ING's profit and loss account, shareholders' equity or capital ratios, the statement said.

ING obtained its stake in Kotak through the merger of ING Vysya Bank with Kotak Mahindra Bank, which was effective from 1 April 2015. Following an agreement between the firms last June, Kotak and ING will continue to co-operate on cross-border business opportunities and to make use of each other's networks for the benefit of their respective client bases. ING continues to serve the international business of Indian clients through its global wholesale banking franchise.

Kotak is an important domestic player in the Indian wealth management market. Last year, along with EY (aka Ernst & Young), it issued a report saying that the wealth of ultra-high net worth individuals in India is expected to rise by 23 per cent during the latest financial year period for 2015, with total wealth standing at $1.964 trillion. The number of UHNW individuals is expected to expand by 17 per cent to 137,100, the report said.