Kotak Mahindra Bank may have been exploring options for acquiring its private-sector rival IndusInd Bank, the UK based Bloomberg reported.
However, the Hindujas IndusInd International Holdings (IIHL) the promoter of IndusInd bank has denied such an occurrence and Kotak has been dodgy in its statements.
Bloomberg reports that the following comes as a consequence of a dispute between the four brothers o the Hinduja family over wealth distribution.
Currently, IndusInd promoters hold around 15% of IndusInd bank through IndusInd International Holdings. The rest is majorly held by institutional investors who have taken a serious hit as the stock price took a fall of almost 60%.
Kotak Mahindra Bank on the other hand has been performing well and has recently had a 52-week high in the value of its stocks. Its market cap remains at Rs. 2.7 Lakh Crores as opposed to IndusInd’s 46,000 Crore.
Kotak Mahindra Bank has been performing well on asset quality and market cap fronts and absorption of IndusInd Bank can yield favourable results for the same. A merger however is predicted to only increment the IndusInd International Holding by 2%.
Both the parties have not yet given a clear indication of a confirmation of the deals or whether such a plan is in discussions and what are the terms looking forward.
The breaking of the news has had a squeamish response from IndusInd Bank’s customers and investors, while a number of many are sitting on the fence hoping to get some official indication as to what lies in the future.
While IIHL has denied such a possibility, Kotak has given optimistic indications while neither confirming nor denying the possibility of such an event occurring in the near future.