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Home / Industry / Banking /  Kotak Mahindra Bank launches QIP to raise up to 7,500 crore

MUMBAI : Kotak Mahindra Bank on Tuesday launched qualified institutional placement (QIP) offering to raise up to 7,500 crore. The bank has set a floor price of 1,147.75 per share for the offering. QIP is a tool used by listed companies to sell shares or other securities to qualified institutional buyers such as mutual funds.

As per Sebi norms, the bank can offer a maximum discount of up to 5% on the floor price to investors.

On Tuesday, Kotak's shares closed trading at Rs1,152.45, down 0.67% on the BSE.

Investment banks Goldman Sachs, Morgan Stanley, Kotak Mahindra Capital and SBI Capital Markets are advising Kotak Mahindra Bank on the deal.

The bank will use the proceeds to bolster its balance sheet as the disruption caused by coronavirus is expected to impact lender's asset quality, as well as to tap opportunities arising out of the crisis.

"Subject to applicable laws and regulations, our Bank intends to use the Net Proceeds to augment its capital base and strengthen its balance sheet, which would assist our Bank in dealing with contingencies or financing business opportunities (which may be organic or inorganic), or both, which may arise pursuant to the economic events driven by the outbreak of COVID, or otherwise," the bank said in its draft offer document.

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