Kotak Bank’s Rs 5,800cr QIP to be India’s 2nd largest

Mumbai: Kotak Mahindra Bank has launched a

qualified institutional placement

(

QIP

) offer of 6.2 crore shares, through which it could mop up about Rs 5,800 crore.

The bank has set a floor price of Rs 913.24 a share, while market players are expecting it could be placed at about Rs 936 — almost at the stock’s closing price on Thursday. If successful, the QIP will be the second largest such offer in India after the Rs 8,032-crore offer by SBI in 2014. This could also turn out to be the largest QIP by a private sector entity ever.

The QIP is part of the RBI-directed plan to cut promoters’ stake in

Kotak Bank

in a staggered manner to 15% by March 2020. Currently, the promoters hold 32% in the bank and, according to the RBI directive, it has to be at 30% by June 30.

On May 9, Kotak Bank’s shareholders had given their consent to issue up to 6.2 crore shares through a public offer, private placement or rights offer including a qualified institutional placement (QIP). Shareholders also allowed the management to raise foreign holding in the bank to 49%. After the bank issues 6.2 crore new shares, promoters’ stake will come down to about 31%. So in effect, the promoters will have one and half months more to dilute another 1% stake in the bank to comply with RBI’s directive.


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