Heliconia Pte, an affiliate of government of Singapore Investment Corporation Pte (GIC), is planning to acquire 2.6% equity stake in Kotak Mahindra Bank Ltd (KMBL), which represents nearly 20 million shares.
Subject to shareholder and other necessary regulatory approvals, the investment in preferential equity issue will fetch Rs.12.96bn ($238m), at a price of Rs. 648 per share, for the Indian lender.
The transaction will boost its Tier I capital for growth opportunities as well as enable it to dilute promoters’ stake in the bank.
Commenting on the development, KMBL president and group CFO Jaimin Bhatt said the investment in the bank by global financial institution GIC underlines the strong fundamentals of the institution.
Consolidated Networth of Kotak Group is Rs.145.68bn ($2.67bn) and capital adequacy ratio for the bank (standalone) stands at 15.6% with Tier I at 14.2%, as on 31 December 2012
Kotak Investment Banking served as the exclusive financial advisor to the transaction.
Heliconia Pte operates as a private company and an affiliate of GIC, which is a global investment management firm incorporated in 1981 to manage Singapore’s foreign reserves.