IndusInd Bank's share price surged up to 4 percent on Monday after reports said that Kotak Mahindra Bank is in talks to acquire the private lender. The stock gained as much as 4.16 percent to Rs 633.30 per share on the NSE. At 12:45 pm, the shares turned flat and traded 1.4 percent higher to Rs 616.65.
The Bloomberg report dated October 25 said that 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.
However, IndusInd Bank denied it and said, "IndusInd International Holdings Limited (promoter), completely denies the said rumour and considers it malicious, untrue and baseless. IIHL is promoted by the Hindujas and broad base of other successful NRIs from the overseas Indian diaspora. They reiterate their full support to the IndusInd Bank, now and always."
The statement continued, "Whenever financial crises have impacted the Indian economy and its financial institutions, the promoter of IndusInd Bank has positively intervened to support and improve the financial position of the bank. It has a solid track record of facilitating the acquisitions in 2002 of IndusInd Enterprises and Finance Ltd (IEFL) by the bank, followed by another one of Ashok Leyland Finance Ltd (ALF) in 2004. Very recently in July 2019, it supported the acquisition of Bharat Financial Inclusion Ltd (BFIL) by IndusInd Bank.
"The promoter would continue to support IndusInd Bank's initiatives to grow inorganically should any such opportunities arise on the horizon in the future. It is worth recalling that amongst the 9 original licensees (4 institutional and 5 private) that were allowed to set up banking operations in 1994, IndusInd Bank is the only privately promoted bank that successfully continues its operations because of the promoter support."
Meanwhile, sources at IndusInd Bank said that the management is not aware of any deal talks with Kotak Mahindra Bank and the promoters have already denied the merger report.
(Edited by : Abhishek Jha)