Karnataka Bank Completes Rs 600 Cr QIP For Equity Shares

The shares were priced at Rs 227 per equity share during the qualified institutional placement (QIP) process, which commenced on 21 March 2024 and concluded on 27 March 2024. A total of 2,64,31,718 equity shares were allotted, resulting in an issue size of approximately Rs 599.99 crore.

The issue price of Rs 227 represents a discount of Rs 14.07 or 1.91 per cent compared to the floor price of Rs 231.43 per equity share set for the QIP issue. This capital raise, consisting of the QIP of Rs 600 crore, along with preferential issues of Rs 800 crore in October 2023 and Rs 100 crore in February 2024, marks the completion of the planned capital raise program of Rs 1,500 crore announced in September 2023. The proceeds from the issues will be used to support the bank's growing business needs.

HSBC Mutual Fund emerged as the largest allottee, securing a substantial 25 per cent allocation, followed by SBI Life Insurance Company and Franklin India Smaller Companies Fund, both receiving allocations of 12.50 per cent each. Max Life Insurance Company secured an 8.33 per cent allocation, while Morgan Stanley Asia Singapore PTE and HSBC Global Investment Funds received allocations of 7.67 per cent and 5.50 per cent, respectively.

Sekhar Rao, executive director of Karnataka Bank, stated, "With this successful QIP allotment, we have strengthened our financial position and attracted reputable institutional investors to our CapTable. The capital raise aligns with our strategic objectives of growth and stability."

NovaaOne Capital served as the sole advisor for the entire capital raise of Rs 1,500 crore, while Ambit and Avendus Capital acted as the book running lead managers for the QIP, according to the bank.

Additionally, the bank announced an agreement with ICICI Lombard General Insurance Company to distribute their general insurance products to its customers. Karnataka Bank offers a wide range of customized products and services, including loans, deposits, and international banking solutions.

In terms of financial performance, the bank's standalone net profit surged to Rs 331.08 crore in Q3 FY24, compared to Rs 300.68 crore in Q3 FY23, with net sales reaching Rs 2,438.69 crore in Q3 FY24, marking a year-on-year growth of 18.7 per cent.