InvestorQ : When and why is Kotak Bank planning to raise fresh monies through equities?
manisha Kolvenkar made post

When and why is Kotak Bank planning to raise fresh monies through equities?

image
Mahima Roy answered.
6 months ago
Follow

One of India’s best performing banks, Kotak Mahindra Bank, has decided to raise up to Rs.7800 crore through the sale of nearly 6.5 crore equity shares. The sale could happen through an FPO or private placement with institutions or a combination of both. At current market prices, this issue has the potential to boost its Tier-1 capital by 300 basis points. While Kotak already has a comfortable capital buffer position, this move will strengthen the balance sheet of Kotak Bank in the event of additional provisions necessitated by the COVID-19. This is also part of the plan to dilute the stake of the promoter as committed to RBI as part of the informal settlement. With the current dilution, Uday Kotak’s stake comes down from 29.9% to 28.9%. He needs to reduce it to 26% by end of September 2020.

8 Views