Uday Kotak – Man behind Kotak Mahindra Bank & The ‘nationalist’ Banker

Uday Kotak, The ‘nationalist’ banker is an Indian billionaire banker, and the founder and managing director of Kotak Mahindra Bank.

Here are a few insights into the success story of Uday Kotak, Founder, Chief Executive Officer (CEO) and Executive Vice Chairman of Kotak Mahindra Bank, an Indian private sector bank.

Early life & Education

Uday Kotak was born 15 March 1959 to Ramesh Kotak and his wife in an upper-middle-class Gujarati Lohana joint-family in Mumbai, which was into the cotton trading business. His father had returned to India from Karachi after Partition.

Uday was raised in a joint-family household with 60 persons under one roof in a large house in Babulnath. His joint-family was originally into cotton and other agricultural commodities trading business.

Kotak completed his schooling in Hindi Vidya Bhavan. Uday completed his college and received his B.com degree from Sydenham College of Commerce and Economics.

He obtained his post-graduation (M.com) degree from the Jamnalal Bajaj Institute of Management Studies.

Life as a Cricketer

Since his childhood, he was passionate about cricket and also passionate about mathematics.

Uday has held the cricket teams’ captainship in school and college. Kotak played the Kanga League in Mumbai.

He wanted to build his career as a cricketer. Uday was a good cricketer—a left-hand spinner and a right-hand batsman.

His contentment towards cricket made him determined to even pursue a career in cricket. In September 1979, the ball hit his head when he was running between the wickets at the Kanga League held in Azad Maidan, Mumbai, and immediate surgery to stop the brain hemorrhage and left him bed-ridden for few months.

The incident not only cost him a year but also marked the end of his cricket dreams. Due to fatal accidents during his college days, Uday missed a year at the Jamnalal Bajaj Institute of Management.

Entrepreneur Journey begins…

After completing his MBA, Kotak was set to join Hindustan Unilever, an Indian subsidiary of the multinational consumer goods company (FMCG Company).

Then he decided to try his hands at business, Uday joined his family business where he would have to deal with family members. Uday was always very keen on finance. He was no longer interested to continue with it.

While doing his MBA, Kotak decided to start out on his own, in the early 1980s, on his father’s insistence, Kotak started his own small financial agency at Navsari building premise from a 300 sq. ft. office space that his father offered him and said: “Son, you do what you want.”

Uday started his finance and bill discounting business with a seed capital borrowed from family and friends. The major part of investment comes from his best friend Anand Mahindra. Therefore the financial agency was named Kotak Mahindra.

Read the success story of Anand Mahindra, Chairman and Managing Director of Mahindra & Mahindra who have carved niche in his own way.

Uday provided financial support to business organizations including Nelco, a Tata subsidiary at minimal interest rates. He charged low-interest rates to business organizations compared to banks.

After getting huge success, Uday decided to establish something big. At the age of 23, Uday initiated Kotak Capital Management Finance Ltd, a financial consultancy, which later became Kotak Mahindra Finance Ltd.

Personal Life & Relationship

He is married to Pallavi Kotak, a marathon runner. They got married within two months of dating. They met at a party for the first time and fell in love. Pallavi supported him to begin his own business.

She could be regarded as the main driving force behind his success. The couple has two children and resides in Mumbai.

The couple has two children. His elder son named Jai Kotak. Jai has done Master of Business Administration – MBA at Harvard Business School.

Dhawal, the younger son is involved in providing mid-day meals to underprivileged students in Govandi-Chembur-Deonar belt in eastern Mumbai. Dhaval wants to feed a million children every day. Dhaval is an undergraduate from Yale University.

Career of Uday Kotak

Over the next few years, Kotak diversified his financial consultancy business into various areas of financial services, establishing a prominent presence in investment banking, bills discounting, stockbroking, mutual funds, life insurance, and car finance.

Uday Kotak: eminent as a self-made billionaire banker.

Uday Kotak’s strong belief that trust is the key for any financial services, later, he collaborated with the Mahindra Group and brought in the new name ‘Kotak Mahindra’.

On 22 March 2003, Kotak Mahindra Finance Ltd received a banking license from Reserve Bank of India. In India’s corporate history, this is the first non-banking finance company in India who received a banking license and transform into a bank from a non-banking finance company.

Uday ended the partnership with Goldman Sachs by acquiring its 25% stake in two subsidiaries for $72 million in 2006.

Kotak collected ₹ 30 lakh to start an NBFC in 1980 for bill discounting. His investment in Hutchison Essar of ₹ 2 crore investment in 1998 fetched him ₹ 1,019 crores in 2006.

Kotak Mahindra Bank – a story of evolution.

Kotak Mahindra Bank has evolved to provide several financial assistance such as asset reconstruction, commercial banking, mutual funds, investment banking, insurance, and more.

In 2014, Kotak converted a bill-discounting business into a financial services conglomerate and become the 2nd largest scheduled commercial bank in India by market capitalization with more than 1270 branches.

In 2015, Kotak Mahindra Bank had partnered with the telco-giant Airtel and ventured into general insurance to start a small payments bank.

Entrepreneur journey of Uday Kotak:

He Stated bill discounting business in 1986, Then entered into hire purchase and lease market in 1987. Uday started the auto finance division in 1990.

He took over India’s largest retail marketing network, FICOM. In 1992, Kotak start Funds Syndication Sector.

Uday incorporated his distribution and brokerage businesses into Securities Company in 1995. He also incorporated his investment banking division into Kotak Mahindra Capital Company in 1995.

In 1996, Uday Kotak bought a stake in Ford Credit and his car finance company was hived off into a Kotak Mahindra Prime Limited, a separate Auto Finance Company.

Uday Kotak launched Kotak Mahindra Asset Management Company and entered the mutual fund market in 1998.

In 2000, He tied up with a pan-African investment, banking, savings, insurance group, Old Mutual Limited and start life insurance business in India.

Uday sold Matrix to Friday corporation and was incorporated Kotak Securities Limited into Kotak Finance Limited in 2001.

He transformed Kotak Mahindra Finance Limited into a Kotak Bank in 2003 which became the first Indian non-banking finance company to do so and received a banking license from the Reserve Bank of India -RBI.

Uday launched a private equity fund named India Growth Fund in 2004. He also started the Real Estate Fund in 2005.

Kotak brought the 25% stake in Kotak Securities and Kotak Mahindra Capital Company which was held by Goldman Sachs in 2006.

Uday started a pension fund under the pension scheme in 2008. Uday Kotak entered as an anchor investor in Ahmedabad Commodity Exchange in 2009. He opened a representative office in Dubai of Kotak Mahindra Bank in 2009.

Achievement and awards:

Uday Kotak has been honored with many prestigious awards for his achievements throughout his entrepreneurial journey.

• 2014 – Named Ernst & Young World Entrepreneur.
• 2014 – Become chairman of IL&FS.
• 2015 – Sole Indian Financier to feature in Money Masters
• 2016 – Most Powerful People in The Financial World.
• 2017 – Ranked 8th in India’s 50 most powerful people.
• 2017 – Businessman of the year by Economic Times.
• 2018 – Named “Best CEOs in the World”
• 2018 – E&Y World Entrepreneur
• 2019 – CNBC Innovator of the Year
• 2019 – One of the most highly paid CEO among the Indian banks.

Uday Kotak is a member of the Board of Governors of the National Institute of Securities Markets and ICRIER. He is also a committee member of the Primary Market Advisory high-level Committee of the Securities & Exchange Board of India.

Today, Kotak Mahindra Bank is one of the most trusted and a one-stop financial shop which provides banking and financial services from commercial banking to investment banking, mutual fund, insurance, and asset reconstruction.

Kotak Bank is the largest wealth manager handling ₹ 2.5 trillion of ultra-HNIs. Kotak Bank runs the largest custody business in India, which gives float money and fees. Kotak Mahindra Bank is the only Indian entity among the top 10 institutional brokerages.

Uday Kotak with his determination and hard work has emerged as a successful banker. It is estimated that this successful entrepreneur and Indian banker is blessed with a net worth of around 10 billion USD.

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