Singapore Heliconia to acquire 2.6% stake in Kotak Bank

MUMBAI: Private sector lender Kotak Mahindra Bank said on Friday that Singapore's Heliconia Pte Ltd will buy 2.6% in the bank for Rs 1,296 crore. Kotak will use the proceeds to fund its growth plans, buy out portfolios and businesses in the financial space.

Heliconia, which is an affiliate of Government of Singapore Investment Corporation Pte Ltd (GIC), picked up the stake at Rs 635 per share. The preferential equity issue is subject to shareholder and other necessary regulatory approvals, the bank said in a statement.

"The fresh infusion of capital will dilute promoter holding and also support growth. Next year, we expect to grow our advances book by 20%. The tier-I ratio of the bank will go up to 16.3% from 14.2%,'' said Kotak Mahindra Bank president and group CFO Jaimin Bhatt.

The fresh issue of shares will bring down promoter holding in the bank to 43.7% from 45%. The ownership norms of the Reserve Bank of India mandate the promoters to dilute their holdings to 20% by March 2018. The bank said recently that it had acquired the credit card portfolio from Barclays Bank to grow its retail business.