Private sector lender Kotak Mahindra Bank on Monday said it will consider raising equity capital through qualified institutional placement (QIP) of shares, rights issue or private placement at a board meeting on Thursday. In a communication to the stock exchanges, the bank said it would also consider the options of a follow-on public offering (FPO), global depository receipts (GDRs) and/or American depository receipts (ADRs) for raising funds.
“…we hereby inform you that a meeting of the board of directors of the bank is scheduled to be held on Thursday, March 30, 2017 to consider raising of equity capital by the bank through rights issue, private placement, follow-on public offering (FPO), qualified institutional placement (QIP), global depository receipts (GDR), American depository receipts (ADR) or through any other permissible mode or a combination thereof, as may be considered appropriate, subject to shareholder approvals as applicable and regulatory/ statutory approvals and requirements,” the lender said in the filing.
In July 2016, the board had approved a proposal to raise R5,000 crore via bonds.
At the end of December 2016, Kotak Mahindra Bank’s capital to risk (weighted) assets ratio stood at 17.6%. Ahead of the announcement, the bank’s shares ended 0.88% lower from their previous close at R870.75 on the BSE and 1.6% lower at R865.30 on the NSE. At this price, the stock trades at 3.5 times price to book for 2017-18.