Founder and chief executive Uday Kotak has held initial talks with the promoters of IndusInd, in which the Hinduja family could retain a stake in the merged entity after a deal, Bloomberg reported on October 25.
The country's third-largest private lender by market capitalisation is looking to take over its smaller counterpart, and boost its assets by around 83 percent, the report said. Meanwhile, the deal could save IndusInd bank after its market value has tanked 60 percent in 2020.
The talks are at an early stage and could still not materialise, the report said.
"We have no comments to offer," a representative for Kotak Mahindra Group told Moneycontrol.
Meanwhile, the promoters of IndusInd Bank told CNBC-TV18: "The Promoter of Indusind Bank, IndusInd International Holdings Limited (IIHL), completely denies the said rumour and considers it malicious, untrue and baseless."
"The Promoter would continue to support Indusind Bank’s initiatives to grow inorganically should any such opportunities arise on the horizon in the future," the statement said. Further, the founders "reiterate their full support to IndusInd Bank, now and always."
IndusInd’s retail lending book is diversified and growing faster than that of Kotak Mahindra Bank, said a report in LiveMint, citing anonymous sources. IndusInd Bank has around 2,000 branches in the country, whereas Kotak Mahindra Bank has about 1,600 branches and 2,500 ATMs.
The Hinduja family, promoters of IndusInd Bank, is currently undertaking litigation in London to resolve a family dispute. Bloomberg reports that discussions for selling the lender originated after the dispute.In September, IndusInd Bank had raised Rs 3,288 crore through a preferential allotment, the report said.