Uday Kotak is studying the possibility of an all-equity acquisition.
Kotak Mahindra Bank Ltd., backed by Asia’s richest banker, is considering a takeover of small Indian rival IndusInd Bank Ltd., people with knowledge of the matter said, a move that would create the country’s eighth financial firm. in terms of assets.
Uday Kotak, founder and CEO of Kotak Mahindra, is studying the possibility of an all-equity acquisition, one of the people said, asking not to be identified as the talks are private. Uday Kotak and the Hinduja family had initial discussions on the proposal that the founders of IndusInd Bank could keep a stake in the lender after a deal, another person said.
A deal would solidify Kotak Mahindra’s position as one of India’s leading private banks, increasing its assets by around 83%. It would also throw a lifeline for IndusInd, which has seen its market value drop 60% to $ 6 billion this year after being hit by concerns over deteriorating asset quality and erosion of low deposits. cost. Kotak acquired the local unit of ING Groep NV in 2014 for 150 billion rupees ($ 2 billion) as part of the largest lender takeover in India.
Deliberations are at an early stage and talks could fail, the people said.
Kotak Mahindra spokesperson declined to comment. IndusInd “completely denies said rumor and considers it malicious, false and unfounded,” the bank’s external spokesperson said in an email, adding that the founders “reiterate their full support for IndusInd Bank, now and always “.
The UK-based Hinduja family have started talks to sell control of the Mumbai-based lender following a dispute between the four brothers over the future of the company’s $ 11.2 billion fortune. family, said one of the people.
Earlier this year, India’s central bank pushed back on the Hinduja brothers’ plans to increase its stake in the IndusInd, people familiar with the matter said in June.
Kotak Mahindra’s market capitalization of Rs 2.7 trillion makes it the third largest lender in India.
IndusInd’s shares fell 64% last year as investors worried that founders were borrowing money against its stocks, deteriorating asset quality and eroding low-cost deposits. The brothers have since repaid the bank’s stock-backed loan.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
