Kotak Mahindra Bank board approves QIP at Rs 913.24 per share

The country's fourth-largest private bank will raise funds primarily to reduce the bank’s promoter shareholding, look at potential mergers and acquisitions and opportunities to buy stressed assets in the banking system.

A meeting of the securities issuance committee is scheduled to be held on Tuesday, May 16, 2017, to, among other things, consider and approve the issue price of the equity shares proposed to be issued, the company filing added.

Following the QIP issue, promoters’ stake in the lender may fall to below 30 percent. 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.

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.

On Tuesday in an extraordinary general meeting, shareholders of the bank approved increasing the limit for foreign shareholding to 49 percent of paid-up capital and the issue of 6.2 crore shares with a face value of Rs 5 each through a private placement, rights issue or QIP.  On March 30, the bank’s board had approved the proposal.

Kotak bank’s current foreign investors’ limit is 42 percent of the capital, as approved by shareholders and RBI. At the end of March, foreign investors held 38.56 percent.

On Thursday, Kotak Bank’s shares ended at Rs 936.85 per share, up by 1.12 percent from its previous close.