IndusInd told Bloomberg it “completely denies the said rumor and considers it malicious, untrue, and baseless.” The spokesman added the founders “reiterate their full support to IndusInd Bank, now and always”.
A deal would cement Kotak Mahindra’s position as one of India’s leading private banks, boosting its assets by about 83 per cent. It would also throw a lifeline to IndusInd, which has seen its market value drop 60 per cent to $6 billion this year after being hit by concerns over worsening asset quality and an erosion of low-cost deposits. Kotak in 2014 acquired the local unit of ING Groep N.V. for $2 billion in the largest takeover of a lender in India.
Deliberations are at an early stage and talks could fall through, the people said. The UK-based Hinduja family began discussions for selling control of the Mumbai-based lender following a dispute between the four brothers over the future of the family’s $11.2 billion fortune, one of the people said.
The central bank earlier this year pushed back on the Hinduja brothers’ plan to raise stake in IndusInd, people with knowledge of the matter said in June. Kotak Mahindra’s market capitalisation makes it India’s third-largest lender by value.
IndusInd’s shares have fallen 64 per cent in the past year as investors fretted over the founders borrowing money against its shares, worsening asset quality, and erosion of low-cost deposits. The brothers have since repaid the loan backed by shares of the bank.
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