Karnataka Bank To Raise Up To Rs 1,500 Crores

The Board of Directors of Karnataka Bank, in its meeting held on Friday, approved raising capital up to Rs 1,500 Crores in one or more tranches by way to preferential issue/rights issue / QIP or any other permissible mode, subject to such necessary regulatory/statutory approvals as the case may be and shareholders' approval.

On a preferential basis, the board has approved issuing, offering, and allocating 3,34,00,132 equity shares of face value of Rs 10/- each, to HDFC Life Insurance, Bajaj Allianz Life Insurance, Quant Mutual Fund, Bharti AXA Life Insurance, and Bajaj Allianz General Insurance at a price of Rs 239.52 per equity share, amounting to up to Rs 800 crore.

According to the regulatory filing by the Board of Directors of Karnataka Bank, "the Board has approved the issuance of up to 3,34,00,132 equity shares of face value of ₹ 10/- each, to HDFC Life Insurance Company Limited, Bajaj Allianz Life Insurance Company Limited, Quant Mutual Fund, Bharti AXA Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited ("Proposed Allottees"), at a price of ₹ 239.52/- per equity share (including premium of ₹ 229.52/- per share), amounting to an aggregate of up to ₹ 800 crores (Rupees eight hundred crores only) on a preferential basis, subject to approval of shareholders of the Bank and other regulatory approvals as may be required."
The proposed issue will help the bank strengthen its' financial foundation for future growth. The proceeds of this issue will be primarily used to meet the needs of the growing business of the bank, including long-term capital requirements and for general corporate purposes.
NovaaOne Capital, a SEBI-registered Merchant Banker, is acting as an exclusive financial advisor to the bank on this fund raise, the bank said.
Karnataka Bank shares on Friday closed 0.73% higher at Rs 241.70 apiece on the BSE. It gained 5.99% in 1 week. It has given 175.91% multibagger return in 1 year, 243.57% in 2 years, and 490.95% in 3 years, respectively.
Mr. Srikrishnan H., MD & CEO of Karnataka Bank, stated, "This capital infusion marks a pivotal moment in our journey. It reflects our commitment to fortify our position in the market and better serve our customers. We are confident that this strategic step aligns with our vision for growth and stability."
Mr. Sekhar Rao, Executive Director of Karnataka Bank, stated, "Our journey of growth is propelled by the strategic capital raise, fueling our ambitions to expand our reach, embrace digital transformation and enhance our technical capabilities, support partnerships and deliver value to all stakeholders."