* Selling up to 62 mln new shares at 930-936 rupees/share
* Fund raising to boost core capital, for acquisitions (Adds details)
MUMBAI, May 11 (Reuters) - India's Kotak Mahindra Bank Ltd is selling new shares worth as much as 58 billion Indian rupees ($900 million) to boost its capital strength and raise funds for potential acquisitions.
The fund-raising comes amid speculation Kotak Mahindra is looking to buy a bigger rival and the issue of new shares will also dilute the almost 32 percent stake held by the bank's founder Uday Kotak.
The billionaire has been ordered by the central bank to cut his stake in the lender, which has a market value of nearly $27 billion, to 30 percent by the end of June and to 20 percent by December 2018.
Kotak Mahindra, the fourth biggest Indian bank by market capitalisation, is selling up to 62 million new shares with a price range of 930 rupees to 936 rupees apiece, according to a deal term sheet.
The price range offers just a 0.1 percent to 0.7 percent discount to the stock's closing price of 936.80 rupees on the National Stock Exchange on Thursday.
In a regulatory filing, the bank said it intended to use the net proceeds to boost its Tier 1 capital ratio, which stood at 15.9 percent at the end of March, and for possible acquisitions.
"The funds raised would enable the bank to capitalise on inorganic opportunities, including acquisition and resolution of stressed assets through, amongst others, potentially participating in a 'Bad Bank'," Kotak Mahindra said in the filing.
Morgan Stanley, Bank of America Merrill Lynch and Kotak Mahindra's investment banking division are the bankers for the placement of shares with qualified institutions. The sale will close early on Friday. ($1 = 64.4080 Indian rupees) (Reporting by Anuradha Subramanyan of IFR and Devidutta Tripathy; editing by David Clarke)