The board of Kotak Mahindra Bank Ltd. has approved a fundraising plan to sell as much as 6.5 crore shares. At the current share price, the private sector lender can end up raising as much as Rs 7,500 crore.
This may help Kotak Mahindra Bank's promoter group, led by Chief Executive Officer Uday Kotak, reduce its stake in the lender to comply with the Reserve Bank of India's shareholding norms for banks. The bank is required to bring down promoters' stake to 26 percent from more than 30 percent as on Dec. 31, 2019.
According to the fundraising plan, 6.50 crore shares of face value Rs 5 each will be sold either through a private placement of shares, a follow-on public offering, a qualified institutions placement or a combination thereof.
The bank had last raised core capital in 2017—Rs 5,800 crore using the QIP route.
On Wednesday, Kotak Mahindra Bank shares rose 2.68 percent to Rs 1,160.40 apiece on the National Stock Exchange while the benchmark Nifty 50 gained 2.29 percent to end the day at 9,187.30 points.
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