Kotak Mahindra Bank is set to raise around $400 million through a qualified institutional offering this week. The private sector bank is in talks with a string of investors including funds of Warren Buffett and other strategic investors for the proposed placement.
The bank may issue 17 million equity shares (around 5% equity) to institutional investors. It has also sounded out some of the private equity players, foreign insurance firms and other bluechip investors. The bank is also said to be in talks with T Rowe Price.
At present, Warburg Pincus holds 9.14% in the bank. The issue is likely to be completed in the next few days. Sources say the bank is looking at placing shares at around Rs 1,050 per share. Kotak Mahindra shares ended at Rs 959.45 on BSE on Friday. The stock has moved 31% in the last one month, and 4% last week. The deal would enable the bank raise around Rs 1,700 crore. Citi is the advisor to the issue.
After the issue, promoter shareholding is likely to come down to around 52%. The promoters have to bring down their shareholding from the current 55.5%. As on June 2007, the capital adequacy ratio of the bank was 11.33%.
Read more in The Economic Times article.
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