Kotak Mahindra Bank on May 31, issued 6.5 crores QIP Shares through which it raised Rs 7,442.5 crore. The Price of One Share was decided at Rs 1,145 by the Bank. Oppenheimer Developing Markets Fund invested in over 8 per cent of issued shares and brought about 52.16 lakh Shares followed by Canada Pension Plan Investment Board who brought 46.25 lakh shares (about 7.12 per cent of the issue). ICICI Prudential Mutual Fund also invested in 6.30 per cent of total Shares and brought 40.96 lakh Shares through 18 schemes.
The Shares Sale was launched on March 26 with the objective to reduce the Bank’s promoters holdings. As on March 31, bank’s capital adequacy was at 17.89 per cent with which its core equity was at 17.45 per cent. Promoter family’s holding was over 29 per cent. According to a report, after the closing of QIP, the Bank promoters are likely to offload their Shares and would sell up to 5.7 Crore Shares to make Rs 6,600 crore at current prices.
On May 13, the bank had said that there is a possibility of consolidation in the financial services space as well and when an opportunity attracts it, the bank wants to be ready with the money for it. Bank has been working to get the promoter shareholding at the desired level which was mandated by RBI or Reserve Bank of India.
RBI suggests that Private Sector Lenders’s Promoter Holding be at 15 per cent. RBI has agreed to let the Kotak Mahindra bank scale down its Promoter’s holding at 26 per cent by August, though it has capped their voting rights at 15 per cent in order to limit their influence on decision making.
The Bank had earlier attempted to reduce its promoter ownership through a complex debt instrument but it did not make a cut with the RBI after which Kotak Mahindra Bank brought this case to court. However, the case was later withdrawn by Private Bank after its suggestions to RBI got approval in February, this year.