Kotak Mahindra Bank plans to raise Rs 5,400 crore equity capital; might pursue consolidation

The board of directors at Mumbai-headquartered Kotak Mahindra Bank has approved the sale of 6.2 crore equity shares to raise equity capital worth Rs 5,369 crore at current prices.

In a notice to the stock exchanges, the bank said that the board approval is subject to approvals from shareholders and other regulations.

Also read: $4

This fresh capital will be used to pursue acquisition opportunities in Indian banking and finance and buying stressed loans from other banks, while also helping fuel lending and digital opportunities.

The money would also help raise funds for bank's subsidiaries.

Also read: $4

Reserve Bank of India's communication asking the bank's promoter and managing director to reduce stake could also be a reason behind this decision to sell shares.

It was last month that the $4 had asked Kotak Mahindra Bank to reduce promoter holding to 30% by June 2017 and to 20% by December 2018.

As per BSE data, $4, MD of Kotak Mahindra Bank, along with family members control 33.61% of bank’s stake as of December 2016. Out of this, 33.30% is held by $4 individually.

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