Kotak Mahindra Bank on Monday said acquiring companies and assets was one of the objectives of the capital raising exercise done during the first quarter, indicating that it is not averse to a merger with rivals such as IndusInd Bank.

Its group chief financial officer Jaimin Bhatt told reporters that the bank will use its capital cushion judiciously and that it will grow its advance book when there are green shoots in the economy.

On Sunday, a Bloomberg report said Kotak Mahindra Bank was exploring the acquisition of smaller rival IndusInd Bank through an all-stock deal. The report said that Uday Kotak, the promoter of Kotak Mahindra Bank, has held talks with the founders of IndusInd Bank and that the latter could retain a stake in the merged entity.

However, the promoters of IndusInd Bank denied the news.

“The promoter of IndusInd Bank, IndusInd International Holdings Ltd (IIHL), completely denies the said rumour and considers it malicious, untrue and baseless. IIHL is promoted by the Hindujas and broad base of other successful NRIs from the overseas Indian diaspora. They reiterate their full support to the IndusInd Bank, now and always,” a statement from the promoters said.

It went on to add that whenever financial crises have impacted the Indian economy and its financial institutions, the promoter of the lender has positively intervened to support and improve the financial position of the bank.

“It has a solid track record of facilitating the acquisitions in 2002 of IndusInd Enterprises and Finance Ltd (IEFL) by the bank, followed by another one of Ashok Leyland Finance Ltd (ALF) in 2004. Very recently, in July 2019, it supported the acquisition of Bharat Financial Inclusion Ltd (BFIL) by the Indusind Bank. The promoter would continue to support IndusInd Bank’s initiatives to grow inorganically should any such opportunities arise on the horizon in the future,” it added.

At a video conference that was held to discuss its second-quarter results, Bhatt said the bank as a matter of policy does not comment on speculation or rumour.

When asked if it will explore the merger and acquisition route, he referred to the Rs 7,000 crore raised during the first quarter.

“When we raised capital in the first quarter, we did talk about the fact that we will look at acquisitions whether it is companies, assets, what not. So, I am not saying a no to any of that growth avenues but certainly not on this one (IndusInd),” Bhatt said.