Kotak Mahindra Bank approves proposal for sale of shares

Published On: Wednesday, April 22, 2020 | By: Team KnowMyStock

Private sector lender Kotak Mahindra Bank on Wednesday approved a proposal to raise capital through the issuance of 6.5 crore shares. According to the current price of its shares, sale of 6.5 crore shares will entail raising up to Rs 7,500 crore. The private lender said the share sale will be either through a private placement, FPO, QIP or a combination thereof, as may be considered appropriate. The issue comes at a time when financial institutions may need capital in order to fend off worries of an escalation of bad loans. The capital raising may help the bank's promoter group led by its chief executive Uday Kotak reduce its holding in the bank to comply with a plan mandated by the Reserve Bank of India (RBI). As part of the bank's plan approved by the RBI, the lender is required to get down the promoters' stake to 26 per cent from the over 30 per cent held as of December 2019. The bank had last raised core capital in 2017 when it raised Rs 5,800 crore through the QIP route.

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