Karnataka Bank boosts capital by Rs 1,500cr, partners with insurance giants

Karnataka Bank’s Board of Directors, convening today, green-lighted an impressive capital augmentation of up to ₹ 1,500 crores. This boost will unfold in multiple tranches and could materialize via avenues like preferential issues, rights issues, QIPs, or other valid modes. Crucially, this move rests on receiving regulatory and shareholder approvals.

Details of the Mega Capital Infusion

Diving into specifics, the bank’s board has sanctioned the issuance of a whopping 3,34,00,132 equity shares, each valued at ₹ 10. Key insurance stalwarts, including HDFC Life Insurance Company Limited, Bajaj Allianz Life Insurance Company Limited, Quant Mutual Fund, Bharti AXA Life Insurance Company Limited, and Bajaj Allianz General Insurance Company Limited, have been earmarked as “Proposed Allottees”. These shares are priced at ₹ 239.52 each, ushering in an aggregate infusion of ₹ 800 crores on a preferential footing. This substantial move is contingent upon approvals from the bank’s shareholders and other pertinent regulatory nods.

Envisioning a Robust Financial Future

This capital initiative is envisaged as a catalyst propelling the bank’s financial robustness, equipping it for exponential growth. The influx from this issuance will primarily nourish the burgeoning business spectrum of Karnataka Bank, catering to long-term capital exigencies and encompassing general corporate pursuits.

Leaders at the Helm Speak

Srikrishnan H., Karnataka Bank’s MD & CEO, spotlighted the significance of this capital maneuver, emphasizing its alignment with the bank’s growth-centric vision. Meanwhile, Sekhar Rao, the bank’s Executive Director, expressed the capital injection’s pivotal role in broadening the bank’s horizons, enhancing digital avenues, fortifying tech prowess, fostering partnerships, and ensuring stakeholders reap benefits.

NovaaOne Capital on Board as Financial Advisor

In this pivotal chapter, Karnataka Bank has roped in NovaaOne Capital, a SEBI-sanctioned Merchant Banker, to steward the bank as its exclusive financial advisor throughout the fund augmentation journey.