After a long lull, the deal street was abuzz with speculation about a merger between Kotak Mahindra Bank and smaller rival Indusind Bank late on Sunday in an all-stock deal. Indusind Bank and its promoters denied the speculation, while Kotak Mahindra Bank (KMB) declined to comment. The last big deal in the private sector banks space had involved KMB merging with ING Vysya Bank in an all-stock deal. Watchers said a merger with the Hindujas Group-promoted Indusind Bank will help KMB on the retail front given the former’s business mix.
When contacted to confirm the speculation, Kotak Mahindra Group’s chief communication officer Rohit Rao said, ”We have no comments to offer.”
Indusind Bank and its promoters strongly denied the speculation. “IndusInd Bank categorically denies any such developments, a bank statement said. The promoter of Indusind Bank, IndusInd International Holdings Limited (IIHL), completely denies the said rumour and considers it malicious, untrue and baseless,” the promoters said. IIHL is promoted by the Hindujas and broad base of other successful NRIs from the overseas Indian diaspora, it said, adding they reiterate their full support to the IndusInd Bank now and always.
It said whenever financial crises have impacted the Indian economy and its financial institutions, the promoters have positively intervened to support and improve the financial position of the bank. KMB’s overall market capitalization is Rs 2.75 lakh crore as against Rs 50,000 crore of Indusind Bank. Indusind Bank stock has been one of the scrips which had experienced highest pressures following the Yes Bank rescue in March.