Kotak Mahindra Bank Ltd on Thursday launched a qualified institutional placement (QIP), targeting around Rs5,662 crore through a sale of 62 million shares. The private sector lender set a floor price of Rs913.24 for the shares, at a 2.5% discount to its closing price on Thursday.
“The board of directors at its meeting has approved and declared opening of the issue on 11 May. It has approved and taken on record the floor price in respect of the issue, based on the pricing formula as prescribed under regulation 85(1) of the ICDR Regulations, at Rs913.24 per equity share,” the firm said in a statement to BSE.
Following the share sale, promoter and executive vice-chairman Uday Kotak’s stake is likely to fall by 3.37%. According to BSE shareholding data, Kotak holds 31.77% in the bank as on 31 March 2017.
In March, Kotak had sold 27 million shares, reducing his stake from 33.3% earlier. He sold a 1.5% stake to two Canadian pension funds—Canada Pension Plan Investment Board and Caisse de Depot et Placement du Quebec—for Rs2,255 crore via open market transactions.
According to a Reserve Bank of India order, Kotak has to cut his stake to 30% by June 2017 and 20% by December 2018.The bank also has to bring down promoter holding to 15% by March 2020, according to the guidelines for new bank licences released in 2014.
Bank of America Merrill Lynch and Morgan Stanley are lead managers to the issue.
The bank’s net profit had risen 40.34% (year-on-year) in the March quarter on higher net interest income and other income. During the quarter, its net interest income rose 16.37% to Rs2,161.37 crore from Rs1,857.24 crore in the year-ago period. However, its gross non-performing assets increased sharply by 12.6% to Rs3,578.61 crore on a sequential basis.
Kotak Mahindra Bank shares ended at Rs936.85, up Rs10.40 or 1.12%, on the BSE on Thursday.