Media Release
Mangaluru, Jan 28: Karnataka Bank Intends to issue equity share capital up to Rs 700 crores out of which Rs 100 crores on a Preferential Basis and balance Rs 600 crore in one or more tranches through permitted means
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 Rs 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 Rs 800 crore by way of Preferential Issue of Equity Shares on October 26, 2023.
The Board of Directors in its meeting held On January 27, had approved to raise balance Rs 700 crore by way of Preferential Issue for an amount upto Rs 100 crore and an amount aggregating up to Rs 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 Rs 10/- to ICICI Lombard General Insurance Company Limited (“Proposed Allottee”), at a price of Rs 265.06/- per equity share (including premium of Rs 255.06/- per share), amounting to an aggregate of up to Rs 100 crores (Rupees One Hundred Crores 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 Rs 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 Rs 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.
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 Co Ltd 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."
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.
The link to the outcome of the Board meeting is as follows: https://karnatakabank.com/investor-portal/corporate-annoucements
About Karnataka Bank Limited
Karnataka Bank emphasizes personalized service for all customers, regardless of their business size or goals. They offer a wide range of customized products and services, including loans, deposits, and international banking solutions. The bank is committed to using modern technology to enhance customer experiences while maintaining a high standard of professionalism and fostering long-term relationships.