Kotak to buy out Goldman stakes for $74 mn
Kotak Mahindra to buy out Goldman Sachs' stakes in their two Indian JUV for Rs 3.33 billion.india Updated: Mar 16, 2006 11:36 IST
Kotak Mahindra Bank Ltd said on Thursday that it would buy out Goldman Sachs' stakes in their two Indian joint ventures for Rs 3.33 billion as it consolidates its financial services business.
The purchase of Goldman's 25 per cent stakes in both merchant bank Kotak Mahindra Capital Co Ltd and financial services firm Kotak Securities Ltd follows local newspaper reports that the US investment bank wanted to go it alone in India.
"Our purchase is consistent with our aspiration to be a global financial institution in our own right," Executive Vice Chairman and Managing Director Uday Kotak said.
The two will maintain ties, however, by entering a business cooperation agreement for up to a year.
Kotak and its subsidiaries will pay Rs 1.23 billion for Goldman's stake in Kotak Securities and 2.1 billion for its stake in Kotak Mahindra Capital, and will then completely own both.
Shares in Kotak rose nearly 5 per cent to Rsd 241 in a firm Mumbai market in early trade.
The buyout of Goldman comes at a time when foreign private equity funds are looking at Indian financial services firms to gain a toehold as in a quickly growing space, as the economy expands 8 percent a year.
"At this point we want to chart our own destiny, but financial services being what it is, we would continue to look at opportunities," Kotak said, in response to a question on whether he might consider another foreign partner.
Foreign ownership in Indian banks is limited to 5 per cent.
Kotak joined hands with Goldman Sachs in 1992, and the two formed an equity joint venture in 1996.
Kotak Mahindra Capital has a presence in the United States, Britain, Mauritius and the Middle East, while Kotak Securities has more than 600 outlets across India.