Karnataka Bank plans to raise Rs 100 crore equity from ICICI Lombard

29 Jan 2024 , 01:06 PM

Karnataka Bank, located in Mangaluru, has chosen to award Rs 100 crore in preferential shares to ICICI Lombard General Insurance as part of its ambitions to raise Rs 700 crore in additional stock.

At a board meeting on Saturday, the bank resolved to allot these shares at a price of Rs 265.06 each. The allocation, however, requires regulatory and shareholder approval. The bank will raise the balance equity in one or more tranches using other permissible methods.

The equity issue is part of a board decision made in September last year to fund Rs 1,500 crore. In October of last year, the bank raised Rs 800 crore by issuing preferred shares.

The planned issuance would assist the bank improve its financial basis in preparation for future expansion. The proceeds of this offering will be used largely to satisfy the bank’s rising business demands, including long-term capital requirements, as well as for general corporate reasons, according to a statement.

The Managing Director and CEO, Srikrishnan H, expressed that the planned injection of capital validates their strategic positioning for both growth and stability. He extended a welcome to ICICI Lombard General Insurance Co Ltd for joining their CapTable, which already boasts well-represented institutional holdings. Srikrishnan H expressed confidence in their upcoming funding round, anticipating the participation of esteemed investors who recognize and support their committed performance for the future.

The bank has hired NovaaOne Capital as its financial advisor for a preferred issue to obtain funds.

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