Kotak Mahindra Bank said that its board has approved raising capital by issuing 6.5 crore equity shares of Rs 5 each.
Private sector lender Kotak Mahindra Bank said that its board has approved raising capital by issuing 6.5 crore equity shares of Rs 5 each, subject to regulatory approvals.
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“The board has accorded its approval for raising of capital by way of issue of equity shares... through a private placement, follow-on public offering, qualified institutional placement or a combination thereof, as may be considered appropriate, subject to shareholders’ approval and governmental/regulatory/ statutory approvals and requirements,” the bank said in a statement to exchanges.
The fund-raising by the bank comes after the Reserve Bank of India asked its promoter billionaire Uday Kotak, to reduce stake to 26 percent by August 2020 from about 30 percent held currently.
However, the most recent equity issuance is expected to reduce promoter stake by about 1 percent, from 29.96 percent currently to 28.97 percent after dilution (at current market price).
This would Uday Kotak will have to still reduce his stake by roughly another 3 percent to reach the 26 percent mark that RBI has mandated.
The bank had earlier reached an agreement with the regulator to bring down promoter stake to 26 percent by August 2020, and not purchase any further paid up voting equity shares’ of the Bank till the percentage of the promoter shareholding reached 15 percent or such higher percentage as permitted by RBI from time to time.