In the early ’80s, Uday Kotak was an upper middle-class Gujarati youngster in Mumbai, armed with an MBA. After a serious sports injury wrecked his plan of being a cricketer, he had started working in the accounts department at his family’s commodity business.
But he wanted to start something of his own. At work, he spent time with Sidney Pinto, one of India’s most famous merchant bankers, who became somewhat of a mentor to him. Pinto advised Kotak to start a bill discounting business as there was limited competition and the duration of the exposure for such financing was short, the merchant banker wrote in a column in July 1997.
After a successful run at bill discounting, Kotak set his eyes on the broader non-bank finance market. In 1985, from a small office in the Navsari building in Mumbai’s Fort area, Kotak and Pinto founded Kotak Capital Management Finance Ltd. Later, Anand Mahindra—the current chairman of Mahindra & Mahindra Ltd.—and his father Harish Mahindra picked 15% stake in the company and joined the board. In 1986, the firm’s name was changed to Kotak Mahindra Finance Ltd.
Seventeen years later in 2003, Kotak Mahindra Finance Ltd. received the Reserve Bank of India’s nod as the first finance company in India to become a bank. The new private lender started operations from 30 branches, covering over a dozen cities in India and eventually rose to be one of India’s most-valued lenders. As of Friday, Kotak Mahindra Bank Ltd.’s market capitalisation was Rs 3.52 lakh crore.
Today, Kotak group—including the bank and other financial services businesses—has total assets worth over Rs 6.2 lakh crore, advances worth Rs 3.59 lakh crore, 4,417 branches, over 1 lakh employees and serves over 4 crore customers.
This is the legacy Kotak leaves behind as he hangs his boots after 38 years of leadership. With him ends the era of bankers who built their businesses from scratch at the dawn of private banking in India. Keki Mistry and Deepak Parekh, who were instrumental in the formation and growth of Housing Development Finance Corp., retired this year after its merger with HDFC Bank Ltd. Aditya Puri, who built HDFC Bank, retired in October 2020. Some other exits, like that of Yes Bank Ltd. founder Rana Kapoor, were not so amicable.
