A possible takeover is in the cards as Kotak Mahindra Bank ltd. is looking to acquire IndusInd bank ltd, as informed by two people familiar with the institutions. Kotak Mahindra could massively expand its presence in the retail segment of the Indian banking sector.
Banks are in talks
Discussions and deliberations are going on between the promoters of Kodak Mahindra and people at IndusInd to merge through a share swap. The sources have been kept anonymous upon their request. The topic is still in exploratory talks and no final decision has been made.
Kotak Mahindra is valued at INR 2.75 trillion and IndusInd bank at INR 50,000 crore.
The abovementioned speculation has been refuted by the promoter of IndusInd bank, and deemed it false and baseless. They claim to have full support of the Hindujas and other wealthy NRIs.
For Kotak, the merger will boost its retail business with the help of IndusInd bank’s expanding retail credit and deposits book.
Reason behind the possible merger
According to IndusInd, their retail lending book is multi-faceted and quickly growing, unlike that of Kotak’s. The news of this merger has arisen when the promoters of IndusInd bank are involved in a family conflict in London.
Apparently, the brothers of the Hinduja family signed an agreement which stated that the assets held by one brother belonged to all. But now The eldest brother and his daughter demanded that the letter should be declared of no legal effect and the family’s assets should be divided.
IndusInd has about 2000 branches all over the country, with the support of 26 million customers. Kotak Mahindra, on the other hand, has 1600 branches and over 2500 ATMs.