Kotak Mahindra Bank, which is a private sector lender has decided to come up with the plan of raising capital which will offer help in promoting Uday Kotak with lower stake and comply with the rules and regulations of Reserve Bank Of India.
As plan is yet to come, the bank has dedcided to sell total of its 4% of its promoter stake, which can be of total sum of Rs8,000 crore.
Two of the people who are familiar with the plans of the bank said that this plan will not only help the company to augment the bank’s capital adequacy but wil laso help CEO Uday Kotak lowe his stake to 26% to comply with the rules and regulation sof the Reserve Bnak Of India.
On Sunday, while filing an exchange satted that the team would be having a meeting on April 22 to confirm a plan to raise equity capital with the help of private placement.
The first person also said that the bank would be selling the stake in 2-3 tranches. Before September 2020, the promoter stake has to be brought down. At present, the bank’s capital adequacy ratio is nearly 18%.
9% capital adequcy rate is must for all the banks currently. CAR refers to the ratio of a lender’s capital in comparison to it’s risk weighted assests and current liabilities.
The market has become conducive for the bank’s promoters to sell their stake, beacuse of the positive rating.
Since past 6 years, Uday Kotak has been finding ways to comply with the norms of RBI. It was year 2017 when Kotak has sold about 3.3% promoter stake worth total amount Rs 8116 in two tranches.