Uday Kotak: Translating vision into achievement

MUMBAI: Uday Kotak is worth over $6 billion and lives in the suitably posh National Centre for the Performing Arts (NCPA) apartment complex, which offers breathtaking views of the Arabian Sea in Mumbai. But he can also be spotted buying bread at the Jai Maharashtra Biscuit Depot in the middle-class neighbourhood of Gamdevi in south Mumbai, where he grew up near Mahatma Gandhi's Mani Bhavan.
This exemplifies his down-to-earth attitude and his belief that it's the real economy that drives the financial world and not the other way round. It’s also what differentiates Kotak and the rest of those who occupy the top echelons of the industry. Kotak’s journey, from being born in a family of cotton merchants to heading a financial giant in a country where the industry is dominated by state-run banks or backed by institutions supported by the government, indicates his ability to achieve success in a difficult and regulated environment.

Kotak realised early on that the 6-10 percentage point differential between PSU bank deposit and lending rates provided enough opportunities to make money hand over fist. The dream of thousands of promoters of non-banking finance companies (NBFCs) in the country is to convert their enterprise into a bank, thus gaining in stature. But the only one who has managed to achieve that so far is Kotak.

This ability — to translate vision into achievement — makes Kotak stand out. Kotak may not be leading a conglomerate the size of ICICI Bank, but he has built a brand entirely by himself starting as an NBFC with an investment of Rs 30 lakh and the backing of the Mahindra group. Anand Mahindra was an early investor and his wife Anuradha Mahindra still owns a 1.7% stake, valued at Rs 1,557 crore, in the bank. In a sense, the key to Kotak's success is that he widened access. For the man on the street, Kotak is to fixed deposits in private companies what Dhirubhai Ambani was for equity investments. Kotak for long was one of the 3Ks that ruled Mumbai's investment banking world — Hemendra Kothari and Nimesh Kampani being the other two.

While the first exited by selling out to Merrill Lynch, Kampani remains mostly a deal maker in his personal capacity. Kotak, meanwhile, forged ahead with businesses ranging from brokerage services to insurance and banking. Mahindra is probably one of the people who knows Kotak best, given his long association.

"At the time of a merger, people would think he would probably say that scale drives him, or he wants to grow to a particular size… but none of the above… Uday is a kind of purist," Mahindra said. "He's a purist who revels in achieving a degree of competence and excellence in finance. That’s what gets him going — doing something that is not just innovative but also done with execution skills second to none in the world." "Uday started as an investment banker. He was in the lending business running a non-banking finance company," says Deepak Parekh, chairman, HDFC.