MUMBAI, March 30 India's Kotak Mahindra Bank Ltd
said on Thursday it planned to sell up to 62 million
shares worth as much as 53.2 billion rupees ($819.4 million) at
current market valuations, to fund potential acquisitions in the
sector among other things.
India's fourth-biggest private sector lender by assets said
its board had approved the sale through a rights issue, public
issue or private placement, including a so-called qualified
institutions placement. The sale is subject to shareholders'
The fundraising proposal comes amid strong market
speculation that Kotak Mahindra is eyeing a takeover of bigger
rival Axis Bank. Axis Bank has called the reports
Kotak Mahindra said it was seeking to raise the funds to
"pursue consolidation opportunities in the Indian banking and
financial services space." It also cited other reasons including
investment in distressed assets.
At an unrelated news briefing on Wednesday, Kotak Mahindra
Chief Executive Uday Kotak said the lender had nothing specific
to announce regarding acquisitions but the lender was looking
"at all options".
India's regulators have long sought more consolidation in
the country's crowded banking sector, especially among
unprofitable state-run lenders that are saddled with a large
number of stressed assets.
Kotak would need the backing of the Indian government to
seal any takeover of Axis, which is about 30 percent owned by
state-owned insurance companies and a government agency.
Kotak Mahindra bought ING Vysya Bank in 2015 in a $2.4
billion stock-swap deal, the biggest ever in India's banking
($1 = 64.9275 Indian rupees)
(Reporting by Devidutta Tripathy; Editing by Rafael Nam and