Published: Thu, May 11, 2017
Business | By Max Garcia

Kotak Bank to raise Rs 5662 cr via QIP,promoter stake to fall


So, at the floor price, the bank would raise about Rs 5,662 crore.

The move is geared towards complying with a Reserve Bank of India (RBI) directive that promoters reduce their holding to 30 percent by June this year.

The billionaire has been ordered by the central bank to cut his stake in the lender, which has a market value of almost $27 billion, to 30% by the end of June and to 20% by December 2018.

"The board of directors at its meeting has approved and declared opening of the issue on 11 May".

Private sector lender Kotak Mahindra Bank plans to raise ₹5,800 crore to support its growth plans through a qualified institutional placement issue.

Just before the end of the fiscal, the promoters had sold a 1.5% stake, or 2.76 crore shares to Canadian pension fund manager Caisse de Depot et Placement du Quebec, helping them pare their stake to 32.08% as on March 31. "It has approved and taken on record the floor price in respect of the issue, based on the pricing formula as prescribed under regulation 85 (1) of the ICDR Regulations, at Rs913.24 per equity share", the firm said in a statement to BSE.

"The funds raised would enable the bank to capitalise on inorganic opportunities, including acquisition and resolution of stressed assets through, amongst others, potentially participating in a "Bad Bank", Kotak Mahindra said in the filing.

After the capital raising, the bank's capital adequacy ratio (CAR) would rise to about 20 percent from 16.8 percent on a consolidated basis as on the March quarter.

Kotak bank's current foreign investors' limit is 42 percent of the capital, as approved by shareholders and RBI.

In a regulatory filing, the bank said it meant to use the net proceeds to boost its Tier 1 capital ratio, which stood at 15.9% at the end of March, and for possible acquisitions.

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