Uday Kotak Biography
Uday Kotak Factsheet
|Birth date||15th March, 1959|
|Occupation||Chairman, Kotak Mahindra Bank|
|Education||Sydenham College Jamnalal Bajaj Institute of Management Studies|
|Net worth||$7.6 billion|
|Country of citizenship||India|
About Uday KotakUday Kotak is the Vice Chairman and the Managing Director of Kotak Mahindra Bank. He is a self made Indian Business man with a net worth of 7.6 billion dollars. In less than two decades he has not only made a prodigious fortune but has also created a brand name in the banking and investment industry. Presently, Kotak Mahindra Bank is the 3rd largest private sector bank in India.
Personal life of Uday KotakUday Kotak was born on 15th March,1959 in Mumbai, India. He belonged to an upper middle class family, who were traditionally Gujarati cotton traders and later expanded into other commodities. He did his schooling from Hindi Vidya Bhavan, Mumbai. When Uday was in school he discovered two talents in him:
- Cricket : He was captain of his school's cricket team, and in college he went to play in Kagna League. Kotak is a big cricket fan.
- Maths : He was very sharp in Maths; it was this second talent that determined his path in life. He obtained his Bachelor's Degree from Sydenham College and completed his post graduation in management studies in 1982 from Jamnalal Bajaj Institute of Management Studies.
Uday Kotak's CareerUday Kotak made an entry into the finance business soon after his graduation. He found that banks gave depositors 6% interest on their investments but charged an interest of 16.5% from borrowers.
Nelco,a subsidiary of Tata needed working capital and Uday took advantage of this opportunity. He formed a small trade-finance business by convincing his family and friends to lend money to Nelco at 12% interest rate and provided short-term trade credit to Nelco at a rate lower than the bank's lending rate.
After the success of this venture Kotak progressed into bill discounting proceeding with the same principles. It was then in 1986, Uday established his company Kotak Mahindra with an initial investment of Rs 30 lakhs and took 50% stake in the business. A huge capital was invested in his business by Anand Mahindra and hence Uday named his finance company as Kotak Mahindra.
Over the years Kotak Mahindra group has grown into several areas like stock broking, investment banking, car finance, life insurance, mutual funds etc.
Journey of Uday Kotak from the inception of Kotak Mahindra Finance Ltd till date
- 1986 - The Kotak Mahindra Finance Ltd started with its bill discounting activity.
- 1987 - Uday's company entered into Lease and Hire purchase market.
- 1990 - He started with auto finance division.
- 1991 - He took over FICOM, which is one of India's largest retail marketing networks.
- 1992 - Made an entry into Funds Syndication Sector.
- 1995 - He incorporated his Brokerage and Distribution businesses into a separate company – Securities. Also the Investment banking division was incorporated into - Kotak Mahindra Capital Company.
- 1996 - His Auto Finance Business was hived off into a separate company - Kotak Mahindra Prime Limited. He bought a significant stake in Ford Credit Kotak.
He set up Mahindra Limited, for financing Ford vehicles and launched Matrix Information Services Limited which marked the Group's entry into information distribution.
- 1998 - He entered the mutual fund market with the launch of Kotak Mahindra Asset Management Company.
- 2000 - He tied up Kotak Mahindra with Old Mutual plc. for the Life Insurance business.
Kotak Securities launched its on-line broking site. Commencement of private equity activity.
Kotak Mahindra Venture Capital Fund was set up to start a private equity venture.
- 2001 - * He sold Matrix to Friday Corporation.
* He launched Insurance Services.
* Kotak Securities Ltd. was incorporated into Finance Ltd.
- 2003 - He converted Kotak Mahindra Finance Ltd into a commercial bank which became the first Indian company to do so.
- 2004 - He launched, India Growth Fund which was a private equity fund.
- 2005 - He realigned Kotak Group's joint venture in Ford Credit and their stake in Kotak Mahindra Prime was bought out. Also, Kotak group’s stake in Ford credit Kotak Mahindra was sold. He also launched a Real estate fund.
- 2006 - He bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities.
- 2008 - He launched a Pension Fund under the New Pension System.
- 2009 - Kotak Mahindra Bank Ltd. opened a representative office in Dubai. He Entered Ahmedabad Commodity Exchange as anchor investor.
- 2010 – He made the Ahmedabad Derivatives and Commodities Exchange which was a Kotak anchored enterprise, operational as a national commodity exchange.
- Today, Kotak Mahindra Bank has the second highest price-to-book ratio amongst major global banks, and the bank’s market capitalization has risen 30 times since it went public in 1992 to about $6 billion. Kotak presently owns 48 percent of the stock. It has gained popularity all over the world with its tag line “Think Investments, Think Kotak”.
Turning point for Uday KotakUday realized the vital importance of the banking industry in the flourishing market like India and the stringent control of the government over this sector. After having established himself firmly as a service provider in the non banking sector, he wanted to make an entry and explore the banking sector. He observed that the sector was controlled by ineffective state owned banks and also the helplessness of the foreign banks to open new branches because of the regulatory approvals. He predicted that since Central Bank has barricaded foreign banks to acquire more than 5% of any domestic banks till 2009, his bank will derive its market share at the cost of state-owned banks. Therefore Mr. Kotak decided to make an entry into the banking sector by applying for a banking license with the RBI and was finally granted with the same in 2003. The banking license allowed Uday to operate at least six different businesses from a single dais. As quoted by Uday himself “A dramatic change has taken place in India. This nation of savers has turned into a nation of investors and spenders. That's an exploding opportunity for a banker”.
Awards and Achievments won by Uday Kotak
- Uday was awarded with “Most Valuable CEO” overall, 2010 by Business World.
- He has been awarded as “Asian Asset Manager of the year” in 2009.
- GIREM presented Kotak Realty Funds Group with “The Investor of the Year Award” for the year 2009
- He was bestowed with “Innovator of the Year Award” by CNBC TV18 in 2006.
- He was awarded the Ernst and Young “Entrepreneur of the Year Award” in 2003
- Uday was featured as one of the “Global Leaders of Tomorrow” at the world Economic Forum's annual meet at Davos.
- He was also earmarked amongst the top financial leaders for the 21st century by Euromoney Magazine.
- He is a member of the Board of Indian Council for Research on International Economic Affairs, Mahindra United World College of India and the Indian School of Business.
Problems faced by Uday Kotak and his survivalUday Kotak's journey wasn't easy as he had to face a lot of obstacles and challenges. The hitches came in the form of investments gone sour when companies like ABCL, the Matrix Information Services etc failed to deliver. Because of his superior entrepreneurial skills he didn't take much time to recover from such instances and hence regained his position as the top Indian banker of his era.
In addition to his caliber, dedication and affinity towards numbers, it is his ability to channel the efforts of his workforce to the maximum possible benefit of his organization which helps him in attaining milestones. This young Indian banker is ranked as the 44th richest person in the world. He assumes social responsibility and in regard of this he has established “Kotak Education Foundation” along with his wife to cater to the educational needs of the under-privileged children.
Last Updated on June 03, 2015