Financial Daily from THE HINDU group of publications
Friday, Mar 17, 2006
Financial Daily from THE HINDU group of publications Friday, Mar 17, 2006 |
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Markets
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Financial Services Money & Banking - Private Banks Kotak aim: Integrated financial services conglomerate Our Bureau
Mr Uday Kotak
Mumbai , March 16 Mr Uday Kotak, Executive Vice-President and Managing Director of Kotak Mahindra Bank, has outlined the strategy for the Group saying that it was aiming at becoming an "integrated financial services conglomerate". Speaking to Business Line after buying out the 25 per cent stakes held by Goldman Sachs, each in Kotak Mahindra Capital Company and Kotak Mahindra Securities, Mr Kotak ruled out de-merger of these subsidiaries or their separate stock market listings in future. "We want to be a financial conglomerate. We do not believe in listing of parts," he said.
To invest in core biz
Asked if the company was looking for acquisition opportunities in retail broking and investment banking business, Mr Kotak said the company's strategy is to invest in core businesses and exit from non-strategic businesses. "We are buyers of business and not sellers (in core businesses). In October last year, the Kotak Group bought 40 per cent stake in Kotak Mahindra Primus Ltd (KMP), held by Ford Credit International (FCI). On the non-core areas, he pointed out to the recent sale of its about 8.33 per cent stake in telecom player Hutchison Essar for Rs 1,000 crore. On the deal with Goldman Sachs, Mr Kotak said: "With the purchase of the investment banking and securities businesses, the group has taken a significant step towards further integrating financial product offerings for customers. The time has come for us to raise our aspirations and scale as the India story becomes centre stage in the global order." Mr Kotak said KMCC would buy the 25 per cent stake held by Goldman in KS. Similarly, KS will buy out the Goldman Sachs' 25 per cent stake in KMCC. "Both the companies have enough of cash," he said. The joint ventures KMCC and KS recorded a profit after tax of Rs 183 crore for the nine-month ended December 31, 2005. The stock market cheered the deal with Kotak Bank's shares gaining by 7.55 per cent on BSE to close at Rs 247.75 on huge volumes. Mr Kotak also said the company extremely benefited from the relationship with Goldman Sachs. Asked whether the one-year cooperation agreement with Goldman Sachs would mean that the US investment bank could begin its own businesses only after one year, Mr Kotak said he does not believe in "standing in the way" of Goldman Sachs or other companies.
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