Shares of Kotak Mahindra Bank fell more than 3 per cent on Monday after the lender informed stock exchanges over the weekend that its MD & CEO, Ashok Vaswani, would not seek reappointment and would step down when his term ends in December, citing personal reasons.
The bank said it has initiated the process of appointing a new MD & CEO, which will be completed within the applicable regulatory timelines.
Kotak Mahindra Bank’s shares closed at ₹3,359.75 on the BSE, down 3.24 per cent from the previous day’s close.
According to Jefferies, the development has surprised investors. “We note Mr Kotak’s Sep 2023 surprise exit; most of the top management has since changed. Stock is up 11 per cent over three years. Anup Saha is a key internal contender, though a six-month process, including external candidates, may create an overhang. Succession quality and durability remain key to growth and rerating,” the brokerage said.
Vaswani joined the bank on January 1, 2024, succeeding founder Uday Kotak, after three decades of global banking experience across Citigroup, Barclays, and Pagaya.
“With about six months remaining before the end of Vaswani’s term, the Board has initiated the succession process and will be required to submit a panel of candidates (preferably two internal and one external candidate) to the RBI for approval. While the early commencement of the process should facilitate an orderly transition, we believe uncertainty around leadership succession is likely to weigh on investor sentiment and keep the stock under pressure in the near term,” Macquarie Research said in a note.
Apart from Vaswani, the bank’s senior leadership now consists of three whole-time directors — Anup Kumar Saha, Jaideep Hansraj, and Paritosh Kashyap.
(Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd)