Uday Kotak is the richest promoter of a bank in India. He comes from a business family. In the 1980s, Kotak decided not to join the family business because for any decision, he was forced to discuss with several of his elders. He launched his own business that catapulted him onto the list of India's richest people. He is the CEO of Kotak-Mahindra Bank, India's fourth largest private sector bank. Why does it have the name Mahindra? Here's the story of the bank and the man behind it.
Uday Kotak's net worth is Rs 1.14 lakh crore. He is the 125th richest man in the world. He was born and raised into an upper-middle class family. It was a joint family. He once famously said that his family was capitalists at work and socialists at home. He loved playing cricket. He also knew how to play sitar.
He is also in mathematics. He earned his bachelor's degrees from Sydenham College in maths. He did his MBA from the Jamnalal Bajaj Institute of Management.
Uday Kotak wanted to be a cricketer. He was a promising cricketer and was the captain of his college. However, during a match, a ball hit him in the head. It took him several weeks to fully recover. After he recovered, he let go his dream of becoming a cricket player and focussed on a marathon innings in the field of finance.
Kotak's is the only Indian bank with two corporate names -- one of Kotak and the other of the Mahindra family. The story behind this is very interesting.
It was Uday Kotak's wedding reception in 1985. Anand Mahindra, a fresh Harvard graduate and an acquaintance of Kotak, was in attendance. A common friend of theirs told him that Kotak was planning to launch a financial company. Mahindra offered to invest in the company. Kotak later suggested that their family names should form the name of the company, reported Economic Times. This is because all the big names in the financial world bore the names of their founders.
They decided to name the company Kotak Mahindra Finance. Anand Mahindra infused a capital of Rs 1 lakh out of Rs 30 lakh, in 1985. Nearly four decades later, the company's market cap is over Rs 3.75 lakh.
Uday Kotak is due to retire this year. He will become a non-executive director.
Kotak's entrepreneurial journey started with his bill discount business.
His genius brain whipped up a business out of thin air. Tata's Nelco used to borrow money from banks at an interest of 17 percent, reported the paper. Kotak offered money at 16 percent to the company. His friends and family members used to park their money at 6 percent in banks. He offered them money at 12 percent. His company pocketed the margin. Mahindra Ugine Steel, Anand Mahindra's company, became his client. They became friends. Within a few years, at Kotak's wedding, he offered to invest in his company.
Kotak became successful because of his sharp mind and a knack for making money after spotting opportunities. In 1989, he found an innovative way to get people to secure financing from Kotak Mahindra Finance. At that time, there was a huge waiting period for cars. He started to book cars en masse in his company's name. Those who need the car early would have to get it financed from Kotak Mahindra. This increased his business.
He founded several joint ventures with global giants throughout the 1990s.
In 2001, RBI allowed private companies to become banks. In 2003, the Kotak Mahindra Bank became the first NBFC to be a bank.
In 2008, during the economic downturn, when banks were skeptical about giving loans, Kotak Mahindra enhanced its corporate loan book.
He received Padma Bhushan in 2020.
