IndusInd Bank soars 4% on takeover buzz; promoters call rumor 'baseless'

According to a Bloomberg report, Uday Kotak, founder and chief executive officer (CEO) of Kotak Mahindra Bank, is looking at the possibility of an all-stock acquisition of IndusInd Bank

Shares of IndusInd Bank advanced 4.2 per cent to hit an early morning high of Rs 633 on the BSE on Monday on report that Uday Kotak, founder and chief executive officer (CEO) of Kotak Mahindra Bank, is looking at the possibility of an all-stock acquisition of the private lender.

"Uday Kotak and the Hinduja family have held initial talks over the proposal in which the founders of IndusInd Bank could retain a stake in the lender after a deal," said a report by news agency Bloomberg. However, when contacted by Business Standard, the Kotak Bank spokesperson said in an emailed statement that the bank had no comments to offer, while IndusInd Bank CEO Sumant Kathaplia said the bank's promoters had already denied it.

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".

At 9:390 am, the stock of IndusInd Bank was ruling 3.4 per cent higher at Rs 628 on the BSE, and was the top gainer on the 30-share Sensex index. In comparison, the benchmark index was down 0.33 per cent at 40,553 levels. Kotak Mahindra Bank, on the other hand, slipped to a low of Rs 1,373 apiece, down 0.7 per cent on the BSE. It hit an intra-day high of Rs 1,400 per share.

If the deal goes through, Kotak Mahindra Bank could emerge as one of India's leading private banks, boosting its assets by about 83 per cent. It would also throw a lifeline to IndusInd Bank, 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, the report said. READ HERE