Karnataka Bank completes equity share capital allotment of Rs 600cr via QIP

In a significant financial move, Karnataka Bank has successfully completed an equity share capital allotment amounting to ₹600 crores through a Qualified Institutional Placement (QIP). This strategic financial maneuver, approved by the Committee of Directors of Karnataka Bank on the day of announcement, underscores the bank’s ongoing commitment to fortifying its capital base to support its expanding operations. The placement, which was initiated on March 21, 2024, and concluded on March 27, 2024, was set at a price of ₹227.00 per equity share, incorporating a premium of ₹217.00 per share.

This recent capital infusion via QIP is part of Karnataka Bank’s broader capital raise program, which was earmarked to reach a total of ₹1,500 crores. This program also includes prior preferential issues totaling ₹900 crores, allocated in October 2023 and February 2024, underscoring the bank’s methodical approach to capital enhancement. With the completion of this QIP, Karnataka Bank marks the fulfillment of its capital raising objectives for the fiscal year 2023-24, indicating robust financial planning and execution.

The response from the investor community to Karnataka Bank’s QIP has been notably positive, reflecting a strong endorsement of the bank’s financial health and strategic direction. The raised capital will be primarily utilized to cater to the growing business needs of the bank, ensuring it remains well-positioned to leverage upcoming opportunities for expansion and service enhancement.

Srikrishnan H., the Managing Director and CEO of Karnataka Bank, expressed gratitude towards the new institutional investors for their trust and support. He highlighted the QIP as a pivotal achievement in the bank’s capital raising journey for FY’23-24, contributing to a more diversified institutional holding. Executive Director Mr. Sekhar Rao also emphasized the dual benefits of this capital raise: bolstering financial strength and welcoming reputable institutional investors, aligning perfectly with Karnataka Bank’s strategic growth and stability objectives.

Behind the scenes of this substantial financial endeavor were NovaaOne Capital Private Limited, serving as the sole advisor for the comprehensive capital raise, and Ambit Private Limited along with Avendus Capital Private Limited, who played pivotal roles as the Book Running Lead Managers for the QIP. This collective effort not only underscores Karnataka Bank’s financial acumen but also its ability to navigate the complex landscape of capital markets with adeptness.