MUMBAI: The equity stake Uday Kotak, the founder and promoter of Kotak Mahindra Bank will fall below 20% following Rs 500 crore issuance of perpetual preference shares on Thursday. The reduction in stake is in line with the a directive from the Reserve Bank of India which said that the promoters has to reduce his stake below 20% by December 2018.
In a notice to the exchange, Kotak Mahindra Bank has said that Uday Kotak's stake will fall to 19.70%. Currently he holds 30% in the bank.
The bank has announced issuance of Rs 500 crore non-convertible perpetual non-cumulative preference shares bearing a coupon of 8.10%. Following this issue bank's capital will increase from Rs 935 crore to rs Rs 1453 crore. Due to increase in the paid up capital, equity stake of promoter and other stake holders will be reduced.
Shares of the bank close 2.5% lower than previous day at Rs 2181 at Bombay Stock Exchange.