SBI chief remarks Uday has deep pockets, is Kotak buying Yes Bank?

Last Updated: Wed, Dec 18, 2019 10:38 hrs
Uday Kotak, Managing Director of Kotak Mahindra Bank

Mumbai: Uday Kotak, the Chairman of Kotak Mahindra Bank, seems to be the 'go to man' to get Yes Bank on track. At least two industry stalwarts have come forth in expressing their confidence on who should be picked to save financially challenged Yes Bank.

At a recently concluded event here this week in Maximum City, State Bank of India Chairman Rajnish Kumar projected Kotak Mahindra Bank as best suited to acquire the financially stressed Yes Bank.

"I think Uday (Kotak) is the best candidate to acquire Yes Bank. You need deep pockets, Uday has that," Kumar was quoted as saying in a PTI story.

Kumar's views were espoused by Axis Bank's Managing Director and CEO, Amitabh Chaudhary. He said, "We (Axis Bank) are a smaller bank... We are trying to ensure that we grow big so that at some stage we can acquire others. So, yes Mr Kotak, they are best suited rather than us..."

Troubles have been mounting for Ravneet Gill headed Yes Bank. The bank indicated that it intended to raise up to $1.2 billion by December and in due course offer investors a seat on the board. Last week, the lender said that it was willing to "favourably consider the offer of $500 million of Citax Holdings and Citax Investment Group and the final decision regarding allotment will follow in the next board meeting."

In media circles the name of a Canadian mystery investor Erwin Singh Braich was hotly pursued. However, the likelihood of that transaction appears grim. The bank has postponed the decision to approve or decline the binding offer of $1.2 billion - 60 per cent of the total capital the bank aims to raise -- submitted by Braich.

Kotak is renowned in industry circles for his no-non-sense approach and clean business practices. Kotak, who once spent his pastime playing the Sitar and Cricket was roped in to steer the crisis hit IL&FS Group's reconstituted board.

Industry insiders are of the opinion that Kotak who is embroiled in an ongoing tussle with the central bank over diluting his stake in Kotak Mahindra could create a win-win situation for Yes and his bank.

The SBI chief's comments came on a day when it got funds from Essar resolution and a theory goes that Kumar may have wanted to distance himself from any responsibilities and hence may have just shared Kumar's name.

Meanwhile, the team at Uday Kotak-led bank has called the theory as a mere industry opinion and distanced itself from the narrative. Speaking about the economy in a different context, he said, "the country's financial system is currently in a Darwinian mode as only the fittest are able to survive."

*With agency inputs