As per the report, Uday Kotak and the Hinduja family have held initial talks over the proposal in which the founders of IndusInd Bank could retain a stake in the lender after a deal.
Even as the Kotak Mahindra spokesperson didn’t respond to the update IndusInd Bank CEO Sumant Kathaplia said the bank’s promoters had already denied it. As per Bloomberg, IndusInd Bank had denied the said rumor and “considers it malicious, untrue, and baseless.”
What happens if the deal goes through?
In case the rumours are true and the deal goes through, then Kotak Mahindra will consolidate its position as one of India’s leading private banks. The deal will help in strengthening its assets by about 83 per cent, and also throw a lifeline to IndusInd, which has seen its market value drop 60 per cent to $6 billion this year after being hit by concerns over worsening asset quality and an erosion of low-cost deposits.
In 2014, Kotak Mahindra had acquired the local unit of ING Groep N.V. for $2 billion in the largest takeover of a lender in India.
Shares of IndusInd Bank was up 4.2 per cent to hit an early morning high of Rs 633 on the BSE on Monday on the reports of the acquisition. At 9:390 am, IndusInd Bank was ruling 3.4 per cent higher at Rs 628 on the BSE, and was the top gainer on the 30-share Sensex index. Meanwhile Kotak Mahindra Bank, slipped to a low of Rs 1,373 apiece, down 0.7 per cent on the BSE. It hit an intra-day high of Rs 1,400 per share.