Kotak Mahindra Bank raises Rs 5,800 crore through India's second largest QIP

Mumbai: Private sector lender Kotak Mahindra Bank on Friday raised over Rs 5,800 crore through a qualified institutional placement (QIP) at Rs 936 a share, sources said.

The issue, which involves sale of 6.2 crore shares will help reduce the promoter holding by 3.37 percent, is the second biggest share sale in India after SBI's Rs 8,000 crore issue in January 2014, they said.

There was high interest among investors in the offering and book was closed at Rs 936 a share as against a floor price of Rs 913.24 it had decided before launching the issue, they said.

There was a "huge demand" from international domestic marquee investors for the issue, they added.

The Kotak Mahindra Bank counter saw keen interest by investors during trading today and closed 1.76 percent at Rs 953.30 a piece on the BSE, as against a 0.21 percent correction in the benchmark.

The bank was yet to intimate the exchanges about the share sale.

It had yesterday opened the issue, seeking to raise over Rs 5,662 crore through sale of 6.20 crore shares through the qualified institutional placement (QIP).

This share sale is part of stake reduction exercise by its promoter Uday Kotak, the vice-chairman of the bank, as per the RBI advice.

The Reserve Bank of India (RBI) had issued a directive that Kotak Mahindra Bank Executive Vice-Chairman Uday Kotak would need to reduce his stake in the bank to 30 percent by June 2017 and 20 percent by December 2018.

Earlier in March, Kotak had sold 2.7 crore shares, reducing his stake in the bank to 31.8 percent, from 33.3 percent.

On March 30, the bank's board had approved a proposal to raise capital through an equity offer by issuing up to 6.2 crore shares of Rs 5 each.

The bank had cited four reasons for the fund-raising. These are to pursue consolidation opportunities in the banking and financial services space, capitalise on opportunities in acquisition and stressed assets resolution, including joining a bad bank, mop up additional avenue for organic growth like more international lending and infuse capital into subsidiaries.