Kotak Mahindra to seek shareholders’ nod to raise Rs5,000 crore via NCDs

NCDs will be valid for a period of one year, Kotak Mahindra Bank says in disclosure to stock exchanges


Kotak Mahindra Bank promoter and vice-chairman Uday Kotak. Photo: Abhijit Bhatlekar/Mint
Kotak Mahindra Bank promoter and vice-chairman Uday Kotak. Photo: Abhijit Bhatlekar/Mint

Private sector lender Kotak Mahindra Bank Ltd’s board has approved a proposal to seek shareholders’ consent to raise as much as Rs5,000 crore though unsecured, redeemable, non-convertible debentures (NCDs, or bonds) on private placement basis.

The NCDs will be valid for a period of one year, Kotak Mahindra said in a disclosure to stock exchanges.

It will seek approval from the shareholders through a special resolution at its forthcoming annual general meeting, or AGM.

Last week, the bank received shareholders’ approval for the proposal to raise Rs5,662 crore through the sale of 62 million shares in a qualified institutional placement (QIP). According to a report in The Economic Times, the bank raised Rs5,803.20 crore through the QIP, which closed early on Friday, 12 May. The sale happened at Rs936 per share, the top end of the Rs930-936 price band indicated by the bank. The share sale was part of a stake-reduction plan by the bank’s promoter and vice-chairman, Uday Kotak.

The Reserve Bank of India (RBI) had issued a directive that as promoter, he is required to bring down his stake in the bank to 30% by June 2017 and 20% by December 2018.

The bank will have to bring down promoter holding to 15% by March 2020, in line with the 2013 guidelines for new bank licences released in 2014.

On 8 March, Uday Kotak sold 28 million shares from his personal stake at Rs826 per share to Canadian pension fund manager Caisse de Depot et Placement du Quebec through a block deal.

As on 31 March 2017, Uday Kotak held a 32.05% equity stake in the company, according to information available with stock exchanges.

On Tuesday, shares of the company closed at Rs955.05, down 1.88% from their previous close.

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