Kotak Mahindra Bank will make a preferential allotment of 2 crore equity shares to Singapore-based Heliconia for Rs 1,296 crore.
The proposed investment will be at a price of Rs 648 a share.
The preferential equity issue is subject to shareholder and other necessary regulatory approvals, the bank said in a statement.
Post-allotment, Heliconia, an affiliate of the Government of Singapore Investment Corporation Pte Ltd, will have approximately 2.6 per cent shareholding in the private sector bank.
The preferential issue will augment the Tier-I capital of the bank for pursuing growth opportunities. It will also be a step towards dilution of promoter stake in the bank, the statement said.
As of March-end 2013, the bank’s promoter group, led by Uday Kotak, Executive Vice-Chairman and Managing Director, had 44.96 per cent stake against 45.11 per cent as of December-end 2012.
On Friday, Kotak Mahindra Bank ended 1.44 per cent higher at Rs 637.75 a share on the Bombay Stock Exchange.