Transaction Closure: Rights Issue by The Karnataka Bank Limited of INR 4,570.4 million

Incorporated in 1924, The Karnataka Bank Limited ("the Bank”), is a South based private bank providing a wide gamut of financial services to cater to the needs of trade, industry, commerce and agriculture. As on December 31, 2010, the Bank had 466 branches across India. The Bank’s capital adequacy ratio was 11.41% (Basel I) and 11.71% (Basel II) as of September 30, 2010.

The Issue of 5,37,69,935 Equity Shares with a face value of INR. 10 each, aggregating INR 4,570.4 million, was made on a rights basis in the ratio of 2 Equity Shares for every 5 Equity Shares held on the record date i.e. February 28, 2011 to the existing shareholders of the Bank for cash at a price of INR 85/- per Equity Share , (including a premium of INR 75/- per Equity Share). The objects of the Issue are to augment the Bank’s capital base to meet the capital requirements and growth in its assets, primarily its loan and investment portfolio, compliance with regulatory requirements including meeting the expenses of the Issue.

The Rights Issue was subscribed 152.43% based on the number of valid Equity Shares applied for.

Edelweiss Capital Limited acted as Sole Lead Manager to the Issue.

This is the second transaction successfully completed by Edelweiss for the Bank. Prior to this, Edelweiss had completed a QIP in Feb 2010 for the Bank.