The Money Multiplier

UDAY KOTAK HAS ENSURED PHENOMENAL GROWTH WITHOUT ADDING TOO MUCH RISK.

- ANAND ADHIKARI

Day Kotak has a simple piece of advice for his team for the next phase of the ₹4 lakh crore market cap Kotak Group's journey into the future. “I am putting this as a modest request to the future team. Let’s work on producing returns for shareholders,” says Kotak, the 60-year-old Managing Director and CEO of Kotak Mahindra Bank. Kotak simply expects the 60,000-member Kotak family to deliver the returns that the group has given in the last three-and-a half decades. The group has given average compounded returns of 40 per cent since its journey began in the 80s. So, if an investor had put in ₹1 lakh in young Kotak’s dream way back in 1985, the investment would be worth ₹2,500 crore today. That is no small achievement for a first-generation entrepreneur whose joint family (with 60 people) was into commodity trading.

Kotak started the business as a small financial services outfit and later converted it into a bank in 2003. Rana Kapoor’s Yes Bank was the only entity that secured a banking licence from the Reserve Bank of India (RBI) in the 2000-10 decade.

Over three decades, Kotak has followed a strategy of universal banking by expanding into non-bank businesses like insurance, mutual funds, private equity, asset management etc. Currently, State Bank of India, ICICI Bank and HDFC Group are the only three other major groups with a similar presence in banking and non-banking businesses. However, for all of them the banking platform remains the biggest of all the businesses.