Dhananjay Sinha positive on Kotak Mahindra Bank

Dhananjay Sinha, Head of Institutional Research at Emkay Global Financial Services told CNBC-TV18, "In Kotak Mahindra Bank, the whole news that has come about with respect to the acquisition of the ING Vysya Bank, that has been the key trigger. Our view is that this bank will continue to ride on the upside because we think that from the merger there will be a certain enhancement as far as business is concerned especially in the southern region. We think that the acquisition of the bank could happen at a much lower valuation and that could be accretive from a synergistic standpoint, from a value and productivity that it can gather over a period of time."

"Initially there might be certain impact with respect to the weighted average RoAs and some of the financials. However, I think the critical thing will be how the bank synergises the capability it acquires, how it deals with the labour union, etc. Those are near-term issues but from a long-term standpoint this is a value accretive proposition for the bank. The bank has not confirmed the news but assuming that this news is correct," he said.

"We have been positive on the stock because we think that there will be a significant amount of fee based revenue that it can generate being in the context of the capital markets. I think in the capital market it is doing well and they will actually derive good set of flows in the current context. So, that is the view on the bank. So, this is a good investing stock."