Kotak Mahindra, the Indian bank, has sold a 2.6 per cent stake in itself to the property affiliate of Government of Singapore Investment Corporation.

Under the terms of the agreement, Heliconia, the GIC-affiliate, will pay Rs12.96 billion ($239 million) for 20 million equity shares in Kotak Mahindra. The preferential issue prices Kotak's shares at Rs648 each, which is around 2 per cent higher than its closing rate on the Bombay Stock Exchange on 11 April 2013. The deal is still subject to shareholder and regulatory approvals. 

Proceeds from the sale will be used to help fund Kotak's balance sheet. The company says it plans to expand operations and increase its lending capabilities in the next few years, whilst diluting its promoter stake in the bank. The sale is also in compliance with Basel III international guidelines, which states that banks should have enough liquid capital to cushion themselves in the event of financial crises. 

As of 31 December 2012, the consolidated net worth of Kotak Group is Rs14,586 crore.