Kotak looks to take over IndusInd Bank

  • The proposed merger will help Kotak Mahindra Bank boost its retail biz

Anirudh Laskar
Published26 Oct 2020, 05:41 AM IST
Kotak’s total advances stood at  <span class='webrupee'>₹</span>2.04 trillion and total deposits at  <span class='webrupee'>₹</span>2.62 trillion at the end of June. . Pradeep Gaur
Kotak’s total advances stood at ₹2.04 trillion and total deposits at ₹2.62 trillion at the end of June. . Pradeep Gaur

Kotak Mahindra Bank Ltd is exploring a potential takeover of smaller rival IndusInd Bank Ltd, said two people aware of the development. If such a deal is clinched, it could significantly expand Kotak Mahindra’s presence in the Indian banking sector, particularly in the retail segment.

The promoters of Kotak Mahindra and their counterparts in

Paras Jain/Mint

IndusInd Bank have engaged in discussions for the merger via a share swap, said one of the two people cited above, requesting anonymity as the talks are private.

To be sure, the two sides are still in exploratory talks, and no decision has been taken.

Kotak Mahindra Bank has a market cap of 2.75 trillion, while IndusInd Bank is valued at around 50,000 crore.

“We have no comments to offer,” said Rohit Rao, chief communication officer, Kotak Mahindra Group.

“The promoter of IndusInd Bank, IndusInd International Holdings Ltd, completely denies the said rumour and considers it malicious, untrue and baseless. IIHL is promoted by the Hindujas and a broad base of other successful NRIs from the overseas Indian diaspora. They reiterate their full support to the IndusInd Bank, now and always,” the promoters of IndusInd Bank said in response to a query.”The promoter reaffirms its unstinted support to IndusInd Bank.”


The proposed merger will help Kotak bolster its retail business as IndusInd Bank has a large, steadily growing retail credit and deposits book.

IndusInd’s retail lending book is diversified and growing faster than that of Kotak Mahindra Bank, the first person cited above said.

The merger discussions come at a time when the promoters of IndusInd Bank, the Hinduja family, are entangled in a family dispute, which is being heard at a London court.

The four Hinduja brothers—Srichand, Gopichand, Prakash and Ashok—had in 2014 signed a document saying the assets held by one brother belong to all, and that each of them will appoint the others as their executors.

But now, family patriarch Srichand Hinduja, 84, and his daughter, Vinoo, want the letter to be declared of “no legal effect” and the family’s assets to be separated as per his wish of 2016.

In September, IndusInd Bank raised 3,288 crore through a preferential allotment to the promoters and other investors. The bank’s promoters have been hoping to receive an approval from the Reserve Bank of India to increase their stake in the bank (to 26%), but that proposal has not been cleared.

IndusInd made a provision of 2,566 crore, related to non-performing loans, of which covid-19 provisions were at 1,203 crore during the June quarter. Consequently, the bank’s fiscal first-quarter profit fell by 64% to 510 crore from a year earlier.

IndusInd’s corporate lending book stood at 83,986 crore (42% of overall advances) at the end of June. The bank’s consumer finance book constituted the rest, with advances of 1.14 trillion, or 58% of overall advances.

IndusInd’s CASA deposits stood at 84,473 crore, which is 40% of the bank’s total deposits at the end of June.

IndusInd Bank has nearly 2,000 branches across the country, serving over 26 million customers. In comparison, Kotak Mahindra Bank has 1,600 branches, 2,516 ATMs and 24 million customers.

IndusInd’s advances grew 2% to 1.98 trillion in the June quarter, while deposits grew by 5% to 2.11 trillion.

Kotak’s total advances stood at 2.04 trillion and total deposits at 2.62 trillion at the end of June.

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First Published:26 Oct 2020, 05:41 AM IST
HomeIndustryBankingKotak looks to take over IndusInd Bank

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