Private sector Kotak Mahindra Bank on Monday said that it has got consent of its shareholders by way of postal ballot in electronic form for raising of capital through issuance of 6.5 crore equity shares of Rs 5 each. The bank, however, did not give a time frame for completing this capital raising plan.
Private sector Kotak Mahindra Bank on Monday said it has got consent of its shareholders to issue 6.5 crore equity shares of Rs 5 each by way of postal ballot in electronic form. The bank, however, did not give a time frame for completing this capital raising plan.
On account of the threat posed by COVID-19, the bank had sent the postal ballot notice in electronic form only to all its eligible shareholders as on Friday, April 17, 2020. The e-voting, that commenced on April 25, 2020 (9:00 AM onwards) and ended on May 24, 2020 (5:00 PM), passed by the members with requisite majority. A total of 99 per cent valid votes casted in favour of the resolution, Kotak Mahindra Bank said in a filing to the Bombay Stock Exchange.
On April 22, the board of Kotak Mahindra Bank had approved the proposal to issue 6.5 crore equity shares of Rs 5 each as part of its plans to raise fund. The proposed capital raise plan was subjected to shareholders' and all other relevant regulatory approvals.
The private lender plans to raise as much as Rs 7,500 crore through the issuance of equity shares through a private placement, follow-on public offering (FPO), qualified institutions placement (QIP) or a combination thereof.
As per media report, the fund-raising is intended mainly at dilution of promoter Uday Kotak's stake in the bank order to comply with Reserve Bank of India (RBI) regulations. On February 18, the RBI had allowed the bank a six-month timeline - up to August - to bring down promoter shareholding to 26 per cent. As of December quarter of this fiscal, promoter Uday Kotak owned 29.96 per cent stake in the bank.
In a separate development, Kotak Mahindra Bank has cut the interest rates for savings bank accounts. As per the bank, interest rates on savings account for balance up to Rs 1 lakh has been reduced by 25 bps to 3.5 per cent from 3.75 per cent earlier. For balance above Rs 1 lakh, the interest rate has been slashed by 50 bps to 4 per cent from 4.5 per cent earlier.
The move comes after the Reserve Bank of India (RBI) on Friday announced an off-cycle repo rate cut by 40 basis points to 4 per cent.
By Chitranjan Kumar