Kotak Mahindra Bank To Raise Over Rs 5,000 Crore Equity Capital
Promoter holding likely to fall to 31.1 percent post the fund raising.
Kotak Mahindra Bank Ltd. plans to raise up to Rs 5,300 crore through an equity offer as the private lender looks at acquisitions and hunts for stressed assets amid growing bad loans in India’s banking sector.
The offer will bring down the promoters’ stake in the lender to 31.1 percent from 32.11 percent. It’s a move towards complying with a Reserve Bank of India directive asking the promoters to cut their holding to 30 percent by June this year.
The board approved a proposal to raise equity capital by issuing up to 6.2 crore shares of Rs 5 each, Kotak Mahindra Bank said in a filing to exchanges. At the current market price of Rs 866.65 per share, the bank can raise up to Rs 5,373 crore.
The company intends to raise the capital via a rights issue, public issue, private placement, including a qualified institutional placement, or any other permissible mode, the filing said.
The bank plans to use the funds raised to pursue consolidation in the banking and financial services space and resolve the problem of stressed assets, including participation in a ‘bad bank’, it said. The lender also intends to explore opportunities in the digital space, domestic and international lending and growth of its subsidiaries.
Earlier Stake Sales
The promoters had sold a 1.5 percent stake, or 27.6 million shares to Canadian pension fund manager Caisse de Depot et Placement du Quebec, earlier this month, lowering their stake to 32.1 percent. As of December 30, 2016, the promoters held 33.6 percent in the bank.