Karnataka Bank to raise funds through equity issue

The Board of Directors of Karnataka Bank, in its meeting held on September 22, 2023 had approved to raise equity capital up to an amount of ₹ 1,500 crore in Indian/ permitted foreign currency, in Indian and/ or overseas markets through issue of equity shares by way of Qualified Institutional Placement, Preferential Issue, Rights Issue, or any other permissible mode of capital issue, subject to such necessary regulatory / statutory approvals as the case maybe and shareholders' approval. Accordingly, the Bank had raised an amount upto ₹ 800 crore by way of Preferential Issue of Equity Shares on October 26, 2023.

The Board of Directors in its meeting held today had approved to raise balance ₹ 700 crore by way of Preferential Issue for an amount upto ₹ 100 crore and an amount aggregating up to ₹ 600 crore through, private placement(s), qualified institutions placement(s) and/or any combination thereof or any other method as may be permitted under applicable laws, subject to such necessary regulatory / statutory approvals as the case maybe and shareholders' approval.

The Board has approved the issuance of up to 37,72,730 equity shares of face value of ₹ 10/- to ICICI Lombard General Insurance Company Limited ("Proposed Allottee"), at a price of ₹ 265.06/- per equity share (including premium of ₹ 255.06/- per share), amounting to an aggregate of up to ₹ 100 crore (Rupees One Hundred Crore only) on a preferential basis, subject to approval of shareholders of the Bank and other regulatory approvals as may be required.

The Board has also approved to issue, offer and allot equity shares of face value of ₹ 10/- each fully paid-up, to permitted investors in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2015, at such price as may be permitted under applicable law, amounting to an aggregate of up to ₹ 600 crore through private placement(s), qualified institutions placement(s) and/or any combination thereof or any other method as may be permitted under applicable laws.

The proposed issue will help the bank strengthen its' financial foundation for future growth. The proceeds of this issue will be primarily used to meet the needs of the growing business of the bank, including long-term capital requirements and for general corporate purposes.

Mr. Srikrishnan H., MD & CEO of Karnataka Bank, stated, "This proposed capital infusion is a validation of our positioning for growth and stability. We welcome ICICI Lombard General Insurance Company Limited to our CapTable adding to the already well represented Institutional holdings. We are confident about our follow-up funding round that will attract marquee investors standing by our committed performance in the future."

Mr. Sekhar Rao, Executive Director of Karnataka Bank, stated, "Our journey of growth and innovation will be further accelerated by the proposed capital raise. This will enable us to explore innovative options for growth and support our ambitions to expand our reach, embrace digital transformation, support partnerships and deliver value to all stakeholders."

NovaaOne Capital, a SEBI-registered Merchant Banker, is acting as financial advisor to the bank on fund raise through preferential issue.

Shares of The Karnataka Bank Limited was last trading in BSE at Rs. 245.85 as compared to the previous close of Rs. 245.35. The total number of shares traded during the day was 271658 in over 4290 trades.

The stock hit an intraday high of Rs. 254.00 and intraday low of 243.55. The net turnover during the day was Rs. 67344133.00.

Source : Equity Bulls

Keywords

TheKarnatakaBank INE614B01018 FundRaising QIP PreferentialIssue RightsIssue