Kotak Mahindra Bank to issue 6.5 crore equity shares

The board of directors at private sector lender Kotak Mahindra Bank on Wednesday approved a proposal to issue 6.5 crore equity shares of Rs 5 each as part of its plans to raise equity capital.

The issue comes at a time when financial institutions may need capital in order to keep away worries of an escalation of bad loans.

The bank said the share sale will be either through a private placement, follow-on public offering (FPO), qualified institutions placement (QIP) or a combination as may be considered appropriate.

"The board has accorded its approval for raising of capital by way of issue of equity shares by the bank for up to 6.5 crore equity shares of Rs 5 each through a private placement, FPO, QIP or a combination thereof," the bank said in regulatory filings at stock exchanges.

In February, the Reserve Bank of India (RBI) granted final approval on the dilution of promoters' shareholding in the bank.

That marked the end of a 13-month old dispute after the RBI had asked bank's Managing Director and Executive Chairman Uday Kotak to pare his stake to 15 per cent as part licensing guidelines.

On January 30, the bank said RBI had agreed to its plan to cut promoter stake to 26 per cent from the current 29.96 per cent over the next six months.

( With inputs from ANI )