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Informist, Saturday, Jan. 24, 2026

 

--Kotak Bk on IDBI Bk stake buy: We look at every opportunity with 3 lenses 
--CONTEXT:Comments by Kotak Mahindra Bk's mgmt in post-earnings analyst call 
--Kotak Bank: Expect credit cost to further go down gradually

 

By Sagar Sen and Arya S. Biju

 

MUMBAI/NEW DELHI – Kotak Mahindra Bank will proceed with any acquisition in the banking sector, including IDBI Bank, only if it meets the three criteria set by the management, Managing Director and Chief Executive Officer A. Vaswani told analysts in a conference call after the announcement of the bank's December quarter earnings on Saturday. "We look at every single transaction that comes up in the market," he said.

 

"Essentially, three criteria that we look at – the first criteria we have is, is this particular transaction going to add to us strategically. If the transaction adds to us strategically, then we look at valuation and is the value lucrative for the firm? I've said time and time again, that for us, scale is scale for relevance and not just scale for size...But even then, there is a third lens that we put to it, " Vaswani said.

 

"The third lens that we put to it is really the lens of saying, what is it going to take to really integrate this kind of acquisition?," he said.

 

Vaswani said the bank was on a significant transformation path of becoming far more customer-centric, and moving towards automation and digitisation. Before taking any final decision on acquisition, the bank would evaluate the deal in terms of integration of processes, human resource and technology, he said.

 

According to media reports, the government has invited financial bids for the strategic disinvestment of IDBI Bank Ltd., which is the final stage of the stake sale. The government is looking to sell its 30.48% stake in IDBI Bank, valued around INR 360 billion at current market prices, along with Life Insurance Corp. of India's 30.24% stake. The total stake on offer is 60.72%, with an estimated combined valuation of nearly INR 720 billion. Informist had reported in November, citing a senior finance ministry official, that Kotak Mahindra Bank appeared to be the front-runner for buying the government's and LIC's stake in IDBI Bank.

 

Earlier in the day, the private sector lender reported a net profit of INR 34.46 billion for Oct-Dec, marginally missing the Street's estimate. 

 

The bank's management expects credit cost to fell further in the coming quarters. For the December quarter, the lender reported an annualised credit cost of 0.63%, lower than 0.79% in the September quarter and 0.68% a year ago. "The unsecured businesses, which is the microfinance, credit card, and personal loan...in microfinance and personal loan, the credit cost actually has started decreasing. Credit card obviously has plateaued, and it's not showing any increasing trend. So, the primary reasons for the reduction in the credit cost is on account of unsecured there's great costs coming down.

In Q4 (Jan-Mar), we expect the credit cost to further gradually go down, and continuing during Q1," Vaswani said.

 

On Friday, shares of Kotak Mahindra Bank ended at INR 422.80, nearly 1% lower, on the National Stock Exchange.  End

 

Edited by Avishek Dutta

 

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