IndusInd Bank shares rally 4% after promoters refute reports of merger with Kotak Mahindra Bank
IndusInd Bankshares saw its value surge by 4% after Bloomberg reported that a merger might be in the works with Kotak Mahindra Bank.
- Kotak Mahindra Bank saw is its shares dip, albeit by less than 1%
- Both banks have refuted the report. IndusInd Bank went so far as to say that it’s “malicious, untrue and baseless.”
IndusInd Bank and its promoters denied the speculation, while Kotak Mahindra Bank declined to comment. "We have no comments to offer," said Kotak Mahindra Group's chief communication officer Rohit Rao. IndusInd Bank went so far as to say that the story was “malicious, untrue and baseless.”
Nonetheless, the shares of IndusInd Bank rallied over 4% after the bank refuted media reports. Kotak Mahindra Bank, on the other hand, saw its stock value marginally in the red.
This comes ahead of Kotak Mahindra Bank reporting its second-quarter earnings post-market hours today.
Not Kotak Mahindra Bank's first merger
According to Bloomberg, Uday Kotak and the Hinduja family have held initial talks about the proposal. The Hinduja family is reportedly looking at selling control of IndusInd Bank after a dispute between the four brothers about the future of their fortune, which comes up to around $11.2 billion.
If true, this isn’t going to be Kotak Mahindra Bank’s first tussle in the acquisition area. In 2014, it merged with ING Vysya Bank in an all-stock deal worth ₹15,000 crore.
Market pundits told PTI that a merger with the Hindujas Group-promoted Indusind Bank would help Kotak Mahindra Bank on the retail front. For IndusInd, this would be a lifeline in the making. Ever since the Yes Bank scam — where its co-founder Rana Kapoor and family were accused of money laundering and currently still under investigation for that and other crimes — IndusInd Bank has seen its value plummet by 60% and drop to $6 billion in 2020.
Concerns over its asset value and corrosion of low-cost deposits have only worsened over the span of the pandemic.
However, IndusInd bank promoters claim that since IndusInd International Holdings Limited (IIHL) is promoted by the Hindujas and has a broad base of other successful NRIs from the overseas Indian diaspora — they are in full support of the IndusInd Bank "now and always".
Kotak Mahindra Bank’s overall market capitalisation currently stands at ₹ 2.75 lakh crore against IndusInd Bank’s ₹50,000 crore.
(with PTI inputs)
US-India to discuss China border tension during 2+2 dialogue as India looks to ensure 'comprehensive disengagement'
EXCLUSIVE: Communities, brand and then product — CEO explains how Stack Overflow flipped the script on software development
ISRO finds that Mars is losing its atmosphere faster than Earth, and planet-encircling dust storms are speeding up the process
Popular on BI
- I'm a 56-year-old IT worker who got laid off last year and have been unemployed ever since. I have a hunch I'm not finding work due to ageism. How do I prove it?
- WhatsApp introduces the “Message Yourself” feature, working on voice status updates and more
- DeSantis says Congress should act if Apple follows through on Elon Musk claims and bans Twitter from App Store
- India Inc.’s rockstars of Q2 and things that investors should look out for, according to analysts
- Best refrigerator under ₹15000
- Asus ROG Phone 6 review: A bit more than just gaming
- Fintech unicorn CRED to acquire SaaS startup CreditVidya
- Jio Haptik and CASHe partner to deliver instant credit lines on Whatsapp