MUMBAI Kotak Mahindra Bank Ltd said on Thursday it planned to sell up to 62 million shares worth as much as 53.2 billion rupees ($819.4 million) at current market valuations, to fund potential acquisitions in the sector among other things.India's fourth-biggest private sector lender by assets said its board had approved the sale through a rights issue, public issue or private placement, including a so-called qualified institutions placement. The sale is subject to shareholders' approval.The fundraising proposal comes amid strong market speculation that Kotak Mahindra is eyeing a takeover of bigger rival Axis Bank. Axis Bank has called the reports "baseless speculation".
Kotak Mahindra said it was seeking to raise the funds to "pursue consolidation opportunities in the Indian banking and financial services space." It also cited other reasons including investment in distressed assets. At an unrelated news briefing on Wednesday, Kotak Mahindra Chief Executive Uday Kotak said the lender had nothing specific to announce regarding acquisitions but the lender was looking "at all options".
India's regulators have long sought more consolidation in the country's crowded banking sector, especially among unprofitable state-run lenders that are saddled with a large number of stressed assets.
Kotak would need the backing of the Indian government to seal any takeover of Axis, which is about 30 percent owned by state-owned insurance companies and a government agency.Kotak Mahindra bought ING Vysya Bank in 2015 in a $2.4 billion stock-swap deal, the biggest ever in India's banking sector($1 = 64.9275 rupees) (Reporting by Devidutta Tripathy; Editing by Rafael Nam and Subhranshu Sahu)
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Updated Date: Mar 30, 2017 22:07:26 IST