Why Kotak Mahindra Bank opted out of IDBI Bank bid; CEO shares reasons

Kotak Mahindra Bank, following its March quarter (Q4 FY26) and the full fiscal year (FY25-26) results announcement, disclosed why it stayed away from the IDBI Bank financial bid.

Ashok Vaswani, managing director and chief executive officer of Kotak Mahindra Bank, said that the valuation of the IDBI Bank was too high, and it would have been a "hard deal to swallow".

"The bank evaluated every acquisition opportunity, including IDBI Bank, but found the valuation to be very, very high," Vaswani said during the post-earnings conference.

Vaswani noted that even the bids received by the government were below the reserve price, reflecting the gap between expectations and market appetite.

While the acquisition could have added scale, it was not a compelling or "slam dunk" strategic fit.

What the lender said in February 2026

In February, the bank had clarified that it has not submitted a financial bid as part of the disinvestment process relating to IDBI Bank. The central government, along with Life Insurance Corporation of India, plans to sell a combined 60.7% stake in IDBI Bank as part of its privatisation drive.

Among the subsidiaries, Kotak Mahindra Life Insurance reported a 24% year-on-year rise in its net profit to ₹90 crore, and Kotak Securities reported a 15% year-on-year rise in profit to ₹400 crore.

However, Kotak Mahindra Prime reported a 19% year-on-year fall in its net profit to ₹240 crore.

Kotak Mahindra Bank financials

Kotak Mahindra Bank on Saturday reported a 10% rise in consolidated net profit to ₹5,423 crore for the fourth quarter of 2025-26, on the back of lower provisions and better net interest income.

In the year-ago period, the profit stood at ₹4,933 crore. On a standalone basis, it reported a 13% year-on-year rise in net profit to ₹4,027 crore.

Core net interest income (NII) of the bank increased 8% to ₹7,876 crore from ₹7,284 crore a year ago.

Net interest margin (NIM) improved to 4.67% from 4.54% in the December quarter. However, it fell on a yearly basis from 4.97% in Q4FY25.

Devang Gheewalla, group chief financial officer of the bank, expects margins to remain rangebound going ahead. "It (NIM) will be range-bound. It will not be as sharp as the current year but will be more gradual in the next year," Gheewalla said during the post-policy press conference.

Net advances increased 16% year-on-year to ₹4.96 lakh crore as on March 31, 2026, from ₹4.27 lakh crore in a similar period last year.

Customer assets, which comprise advances (including IBPC & BRDS) and credit substitutes, grew to ₹5.46 lakh crore as at March-end 2026 from ₹4.78 lakh crore a year ago.

Total period-end deposits grew 15% year-on-year to ₹5.73 lakh crore in Q4FY26. The average total deposit also rose 15% to ₹5.38 lakh crore. The average current deposit was higher by 18% at ₹77,058 crore during the quarter.

The asset quality of the bank improved in the reporting quarter, with the gross non-performing assets (NPA) ratio falling to 1.20% as of March 31, 2026, from 1.42% as of March 31, 2025.

Provisions and contingencies of the lender fell by 43% year-on-year to ₹516 crore in Q4FY26, from ₹909 crore in Q4FY25, according to the investor presentation.