In a move to fund its business growth, Karnataka Bank's board approved a plan to raise Rs 1,500 crore on Friday. The capital will be raised in one or more tranches through share sales, including preferential issues, rights issues, Qualified Institutional Placement (QIP), or any other permissible mode, subject to necessary regulatory approval.
The bank also announced the issuance of up to 3,34,00,132 equity shares of face value of Rs 10 each, at a price of Rs 239.52 per equity share. This issuance amounts to an aggregate of up to Rs 800 crore on a preferential basis. The shares will be issued to HDFC Life Insurance Company, Bajaj Allianz (ETR:ALVG) Life Insurance, Quant Mutual Fund, Bharti AXA Life Insurance, and Bajaj Allianz General Insurance. However, this is subject to the approval of shareholders and other regulatory approvals as may be required.
The proposed issue is expected to help the bank strengthen its financial foundation for future growth. The proceeds from this issue will primarily be used to meet the needs of the growing business of the bank, including long-term capital requirements and general corporate purposes.
NovaaOne Capital, a SEBI-registered Merchant Banker, is acting as an exclusive financial advisor to the bank on this fund raise.
On Friday, Karnataka Bank shares closed 0.73% higher at Rs 241.70 apiece on the BSE. Over the past week, it gained 5.99%. The bank has seen significant growth with returns of 175.91% in 1 year, 243.57% in 2 years, and 490.95% in 3 years respectively.
Mr. Srikrishnan H., MD & CEO of Karnataka Bank, stated that this capital infusion marks a pivotal moment in their journey. He expressed confidence that this strategic step aligns with the bank's vision for growth and stability. Mr. Sekhar Rao, Executive Director of Karnataka Bank, echoed these sentiments, stating that their journey of growth is propelled by the strategic capital raise, which supports their ambitions to expand reach, embrace digital transformation, enhance technical capabilities, support partnerships, and deliver value to all stakeholders.
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