Kotak Mahindra to raise Rs 5,363 crore equity capital

Kotak Mahindra bank said on Thursday its board has authorized the proposal to lift fairness capital of sixty two million shares, with a face worth of Rs 5 each, or Rs 5,363 crore ($819 million) as on Thursday’s closing price of Rs 865.

The u . s .’s fourth-largest personal sector lender seems to have dropped the most important hint about its presence in the shopping market, with Thursday’s transfer strengthening speculation of an impending takeover. Kotak shouldn't be new to acquisitions; it paid $2.4 billion for ING Vysya in 2015 – billed as the Indian banking sector’s largest deal yet.

In a submitting to exchanges, the financial institution said, “the purpose of raising fairness capital can be to augment Kotak’s capital base to pursue consolidation alternatives within the Indian banking device and monetary products and services space.”

Or it's going to use the funds to capitalise on alternatives available in acquisition and backbone of stressed out property in the banking sector, including participation in the ‘unhealthy bank,’ or in opposition to new opportunities in digital or subsidiary enlargement, it brought.

The funds could also be raised thr
u a rights difficulty, non-public placement, FPO, QIP, GDRs, American Depository Receipts or thru another permissible mode or a mixture thereof, which the board decides is appropriate.

The announcement comes a day after government Vice-Chairman and Managing Director Uday Kotak played down the acquisition buzz, though he admitted to be open to all options.
The crowded Indian banking sector is present process consolidation with SBI and affiliate banks merging into a single entity on April 1.
the government also expressed its intent to merge other nationalised banks to cut back the overall number to 4-5.  

RBI had issued a directive that the bank’s promoters (Kotak family, led via Uday Kotak) would need to scale back their stake in the bank to 30 per cent by way of June 2017 and to 20 per cent by way of December 2018. As of December 2016, the promoter’s stake within the financial institution used to be nearly 33.61 per cent.


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