Kotak Mahindra stalls IPO

The Indian financial services firm had planned to raise a £100m infrastructure fund on the London Stock Exchange, but it has postponed the initial public offering because it could not meet one of the exchange’s listing requirements.

Indian financial services firm Kotak Mahindra has postponed the planned launch of its Kotak India Infrastructure Fund on the London Stock Exchange (LSE), saying that it could not satisfy one of the requirements for listing on the LSE. 

Kotak said in a statement that it had received interest “well in excess” of the minimum needed to float the initial public offering, but it could not meet a requirement that at least a quarter of the fund’s shares be held in public hands.

Kotak was planning to use the fund, targeted at £100 million ($161 million; €119 million) to invest in “listed and to-be-listed equity and equity linked securities” of Indian companies or companies that generate a “significant portion of their business from India”, according to a previous statement. 

Kotak estimated the fund would give investors exposure to a portfolio of 40 to 60 companies.  

The fund’s investment manager is Kotak Mahindra UK, a wholly-owned subsidiary of the Mumbai-based bank.

Despite the setback, Indian-focused infrastructure funds continue to raise capital on the LSE. Last week, Infrastructure India, which is also listed on the LSE, placed £33 million worth of new shares, according to a statement.  

The company also acquired a 50 percent stake in India Hydropower Development Company and a 99.99 percent stake in Vikram Logistic & Maritime Services from US-based asset manager Guggenheim Partners.

Infrastructure India said its cash payment of $1.5 million and its stock offering of 111 million new ordinary shares valued the two companies at about $191.5 million.  

Kotak did not say when it planned to launch the fund, but said it continues to believe “the listed Indian infrastructure sector is poised to grow significantly in the next few years”. 

Kotak Mahindra was established in 1985. Its interests include commercial and investment banking, insurance, and private equity.