Kotak Mahindra Bank is set to launch a share sale to institutional investors which is aimed at raising as near as $2 billion in multiple sections as the private sector lender looks to dilute the promoter’s shareholding to comply with regulatory norms and raise capital.
The private sector lender will first launch a Rs 7,500 crore institutional share sale this week of fresh equity, said related people. Post that, promoter Uday Kotak will sell about 57 million shares to public investors, a holding valued at about Rs 6,600 crore at current prices. The transaction comes at a time when banks require capital in order to rebuff worries about bad loans surge in the situation of the Covid-19 pandemic.
The qualified institutional placement (QIP) could begin early this week, said people with knowledge of the matter.
“Pricing could also be on the most 2-3% low cost to present market worth,” mentioned a senior govt with information of the matter. Kotak Mahindra Financial institution closed at Rs 1,165 on Friday, up 1.3%, for a market worth of Rs 2.23 lakh crore.
“Kotak Financial institution stays finest positioned throughout metrics, in our view, with a best-in-class legal responsibility franchise, prudent underwriting, robust capital place, sufficient margin levers (100bp larger SA fee vs friends regardless of current reduce), and robust foreign money to discover inorganic alternatives,” Nomura analysts Amit Nanavati and Tanuj Kyal wrote on Might 14.