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Kotak Mahindra Bank Shares Trade Higher On QIP Launch

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Shares of Kotak Mahindra Bank rose as much 4.3 percent to Rs 1,203.35 in morning trade on Wednesday as the private lender started inviting bids for its qualified institutional placement (QIP) of 6.5 crore equity shares. It plans to raise up to Rs 7,500 crore and set a floor price of Rs 1,147.75 per share, based on the pricing formula as prescribed under the SEBI ICDR Regulations, it said.

 
Kotak Mahindra Bank Shares Trade Higher On QIP Launch

On Tuesday, in a stock exchange filing, it also said that "the Bank may at its discretion consider offering a discount of not more than 5% on the floor price so calculated for the Issue."

 

Kotak Mahindra Capital, Goldman Sachs, SBI Capital Market and Morgan Stanley are managing the share sale.

"Our bank intends to use the net proceeds to augment its capital base and strengthen its balance sheet, which would assist our bank in dealing with contingencies or financing business opportunities (which may be organic or inorganic), or both, which may arise pursuant to the economic events driven by the outbreak of Covid-19, or otherwise," the bank said in its draft offer document.

The QIP issuance is expected to help dilute promoter Uday Kotak's shareholding to 28.94 percent. In February, the Reserve Bank of India (RBI) had given the bank six months to bring down its promoter holding to 26 percent.

Read more about: kotak mahindra bank
Story first published: Wednesday, May 27, 2020, 11:38 [IST]
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