The board of Karnataka Bank has given the green light to raise Rs 1,500 crore to support its business expansion.
This capital infusion will occur through the sale of shares, potentially in multiple phases.
The bank disclosed this in a filing to the stock exchanges, indicating that the funds may be raised via a preferential issue, rights issue, QIP, or any other authorized method, pending approval from shareholders and regulators.
Equity Shares to Be Issued to Key Investors
Additionally, the bank’s board has sanctioned the issuance of 3,34,00,132 equity shares with a face value of Rs 10 each to prominent investors, including HDFC Life Insurance Company, Bajaj Allianz Life Insurance, Quant Mutual Fund, Bharti AXA Life Insurance,
and Bajaj Allianz General Insurance. The pricing for this preferential issue is set at Rs 239.52 per equity share, resulting in a total of Rs 800 crore to be raised.
Utilization of the Raised Funds
The proposed fundraising initiative is intended to bolster the bank’s financial foundation to facilitate future growth.
The proceeds will primarily be directed toward meeting the bank’s expanding operational requirements, encompassing long-term capital needs and general corporate goals.
As of September 22, Karnataka Bank’s shares closed at Rs 241.70 on BSE, registering a marginal increase of 0.73 percent, while on NSE, the closing price stood at Rs 243.40, reflecting a 1.46 percent rise.
Impressive Q1 Profit Surge
Karnataka Bank, with a significant presence in Karnataka, boasts approximately 46 percent of its branches in rural and semi-urban regions.
The bank operates 901 branches throughout India, including 575 in Karnataka. Notably, in the first quarter of the financial year 2023-24, Karnataka Bank recorded a net profit of Rs 370.70 crore.
This marks a substantial increase of 224.66 percent compared to the net profit of Rs 114.18 crore achieved in the corresponding quarter of the previous year.
During April-June 2023, the bank’s operating profit reached Rs 601.17 crore, and net interest income amounted to Rs 814.68 crore.
Furthermore, business turnover witnessed a 6.85 percent year-on-year growth, reaching Rs 1,48,449.27 crore, up from Rs 1,38,936.17 crore in the same quarter last year.
