Karnataka Bank plans to raise Rs 6,000 crore through debt this fiscal year

Karnataka Bank plans to raise up to Rs 6,000 crore of loan capital during the current fiscal year, and will seek shareholder approval at the AGM that will follow next month.

In addition, the private sector lender also plans to raise equity by issuing 15 crore of shares through qualified institutional placement (QIP).

Its Annual General Meeting (AGM) is scheduled for September 2.

Regarding the debt increase plan, he said that in the normal course of business, a bank borrows money to meet its business needs through various means and to meet its capital needs.

As a result, it is proposed to obtain the consent of the members of the bank to borrow funds in Indian / foreign currencies up to Rs 6,000 crore in the form of debt instruments, in one or more installments, said Karnataka Bank. in its 2020-21 annual report. .

On the QIP plan, the approval of the members will be sought to create and offer, for cash at a price such that “the total number of fully paid shares to be issued will not exceed 150,000,000 (150 million) shares, at subscribed by the QIB ”, he declared.

Equity shares must be offered in one or more tranches.

“The board of directors, at various intervals, has felt the need to integrate institutional investors. In this direction, the bank has launched strategic initiatives.

“In addition, maintaining a sufficient capital ratio improves the bank’s risk appetite given the economic uncertainties associated with the COVID-19 pandemic,” he said.

In view of these elements, the board of directors has seen fit to seek shareholder approval to increase the capital through QIP, he said.

The private sector lender posted a net profit of Rs 482.57 crore in FY21, up nearly 12% from a year ago. However, the total income dropped slightly to Rs 7,727 crore.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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