Kotak Mahindra share price rises as its unit secures UAE license to offer investment services

Kotak Mahindra (International) Limited (KMIL), a wholly owned subsidiary of Kotak Mahindra Bank Limited, has announced that it has secured a license from the Securities and Commodities Authority (SCA), the capital markets regulator of the United Arab Emirates. The license permits the company to undertake Investment Fund Management and Portfolio Management activities.

Following the development, shares of Kotak Mahindra Bank were trading 1.9% higher at ₹2,015.8 apiece on the NSE at 12:29 pm.

With this approval, KMIL has become the first Indian firm to receive such authorisation from the SCA, which the company described as a significant milestone in the advancement of cross-border financial services. The approval also enables the firm to establish UAE-domiciled funds aimed at retail investors, reinforcing the UAE’s role as a regional financial and investment hub.

“We are honored to receive this license from the Securities and Commodities Authority. It is a testament to our enduring commitment to the UAE and our vision of fostering globally integrated, transparent capital markets,” said Shyam Kumar, President and Head, Kotak International. “India’s economic momentum continues to attract global interest, and through this license, we are excited to offer UAE retail investors access to our India-focused investment strategies - enabling them to participate in one of the world’s dynamic and resilient markets. We will offer India-centric investment options to help investors diversify their portfolios,” the company said in its Media Release.

According to the company, it plans to leverage the license to contribute to the growth of the UAE’s investment fund industry by launching retail-focused products. KMIL intends to introduce funds aligned with its existing UCITS (Luxembourg-domiciled) and India-domiciled strategies, with subscriptions expected to open for UAE investors by the final quarter of calendar year 2025.

The development, the company noted, reflects Kotak Group’s commitment to work alongside global regulators to broaden access to capital markets for a wider pool of investors. With regulatory approvals in India, the USA, UK, Singapore, Mauritius, and now the UAE, Kotak has continued to expand its international footprint and strengthen its role within the global financial ecosystem.

Kotak Mahindra Bank reported a net profit of ₹3,282 crore for Q1FY26, reflecting an 8% decline from the previous quarter's ₹3,552 crore. On a year-on-year basis, profit comparison was skewed due to an exceptional gain of ₹3,520 crore in Q1FY25 from the sale of a 70% stake in Kotak Mahindra General Insurance to Zurich Insurance. Provisions more than doubled to ₹1,208 crore from ₹578 crore in the same period last year, while gross NPAs rose to ₹6,638 crore compared to ₹5,477 crore a year ago. Net NPA stood at 0.34%, slightly above the previous quarter’s 0.31%.

Despite the profit dip, the bank delivered strong operational performance with total advances growing 14% YoY to ₹4,44,823 crore. Within this, unsecured retail advances formed 9.7% of net advances, reflecting a cautious approach to retail credit. Average total deposits grew 13% YoY to ₹4,91,998 crore, led by a 19% rise in average term deposits and a 9% increase in current account deposits. Savings deposits rose modestly by 2%, while the CASA ratio remained healthy at 40.9% and term deposit sweep balances surged 23% YoY.

The bank’s credit-to-deposit ratio stood at 86.7%, supported by cost discipline with a 5.01% cost of funds. Operating profit rose 6% YoY to ₹5,564 crore, indicating sustained core earnings momentum. Customer base expanded to 5.4 crore from 5.1 crore in the year-ago period, underlining steady growth in customer acquisition.