Affirming that inorganic options will remain an integral part of the bank’s strategy to grow scale, Ashok Vaswani, managing director and CEO of Kotak Mahindra Bank, said every single opportunity will be pursued. When asked about the ongoing sale of IDBI Bank, Vaswani said the same logic would hold.

Vaswani said Kotak Mahindra Bank is clear that it needs to scale up. “Scaling is going to come both organically and inorganically. Every single opportunity inorganically, we’re going to look at it, and there’s no question about it,” he affirmed. He was, however, categorical in asserting that the acquisition targets need to gel with the bank’s strategic objectives and should make sense financially. “That’s true of IDBI, and that’s true of any other opportunity that comes along”.

To put things in context, the Life Insurance Corporation of India (LIC) and the government initiated the divestment process at IDBI Bank in October 2022.  Several investors submitted letters of intent in early 2023. According to media reports, Canadian private equity major Fairfax, Kotak Mahindra Bank and Middle East’s Emirates NBD are seen as top contenders to pick up the 60 percent stake which has been placed for divestment.

While media reports suggest that the Reserve Bank of India may have cleared a few names, including the three potential investors, for the purpose of divestment, Vaswani did not want to comment further on the matter. “I’m not even sure where we are in the process,” he said.

Kotak Mahindra Bank, valued at approximately $44 billion (Rs 3.59 lakh crore), has retained its position as the fourth largest private bank since its acquisition of ING Vysya Bank in an all-stock deal in 2015.

It is anticipated that the stake sale in IDBI Bank may conclude by March 2025. When asked if Kotak Mahindra Bank is exploring other options, Vaswani’s response was that valuations of potential acquisition targets are rich now. “I honestly look at all kinds of opportunities. We looked at an opportunity and just closed a microfinance company. Right now, valuations are very rich”.

In February last year, Kotak Mahindra Bank concluded the acquisition of Sonata Finance Pvt Ltd, a lender focused on microfinance loans, for a consideration of Rs 537 crore.

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Published-October 01, 2024 / 00:02 IST