Kotak Mahindra Bank gains 2% after closure of Rs 500 crore preferential issue
NEW DELHI: Shares of Kotak Mahindra Bank gained over 2 per cent in today's trade after the company concluded its Rs 500 crore issuance of perpetual preference shares on Thursday.
With this the stake of Uday Kotak, in line with the a directive from the Reserve Bank of India, will fall below 20 per cent.
The RBI had asked the promoter to reduce his stake below 20 per cent by December 2018.
Following the development, the stock rose 2.01 per cent to hit a high of Rs 1,306.75 on BSE.
In a notice to the exchange, Kotak Mahindra Bank has said that Uday Kotak's stake will fall to 19.70 per cent. Currently he holds 30 per cent stake in the bank.
The bank has announced issuance of Rs 500 crore non-convertible perpetual non-cumulative preference shares bearing a coupon of 8.10 per cent. Following this issue bank's capital will increase from Rs 935 crore to Rs 1,453 crore. Due to increase in the paid up capital, equity stake of promoter and other stake holders will be reduced.