“The trouble with opportunity is, it never announces when it comes. It's only after it's gone, you'd realize that you missed it.” - Uday Kotak
Every opportunity must be seized, explored, and utilized for one’s benefit. Especially in the field of business and entrepreneurship, when an opportunity presents itself, it is not a good idea to turn a blind eye.
Today we will look at the story of such a legend, who noticed an opportunity in the early 1980s, quickly sprung into action to create a successful business, which is now known as Kotak Mahindra Bank Ltd.
Uday Kotak’s Sporty Childhood
Uday Kotak was born in a Gujarati upper-middle-class joint family on 15th March 1959. His family was primarily engaged in cotton trading but later diversified into other commodities.
Though his family could afford to send him to any of the top schools, they chose to send him to an obscure institution, Hindi Vidya Bhavan, mainly because the school had been inaugurated by one of the nationalists in whose principles Kotaks firmly believed.
Uday was known to be really passionate about cricket, sitar, and mathematics. It is said that his first love was cricket, and the second, playing the sitar. He firmly decided to pursue cricket and was the captain of his school and college teams.
He currently plays neither of them! But his love for numbers has been growing ever since. He got into Sydenham for a four-year B.Com course post which he joined from Jamnalal Bajaj Institute of Management Studies to pursue post-graduation in management studies.
Kotak Mahindra Bank wouldn’t exist today!
Yes, you heard it right.
In September 1979, he was playing cricket in the Kanga League, thwacked the ball, and went for a run. Presumably, a fielder threw the ball back to the stumps, and somehow, it hit Uday on the head. He was rushed to the hospital, where the doctors informed his parents that he had a brain hemorrhage. There was not much hope left, nevertheless, they performed the surgery.
The recovery took him quite some time. As he could not attend college, he decided to join the family business. He wasn’t very comfortable with the fact that every decision of his needed the opinion of 14 family members. Working in the family business was a great learning experience for him, as he realized that it is indeed not his cup of tea!
But maybe, this fatal accident is the reason Kotak Mahindra Bank exists today. Had Mr. Uday not been through this, probably a billionaire banker would now be seen coaching some future cricketers of the country! You never know!
After completing his MBA and swearing to never go back to his family business, Uday was all set to join Hindustan Unilever. Prior to this, his family recognized his amazing financial skills and offered to provide him an office space where he was free to do his own thing.
It was then when he noticed that there was a widespread in the bank’s interest on loan and interest on the deposit. He recognized an opportunity. He incorporated a finance agency, Kotak Capital Management Finance Ltd. His friend Anand Mahindra (yes, the same Mahindra you know) later joined hands with Uday, and the firm was renamed Kotak Mahindra.
It was then when he found out that Nelco required working capital. He borrowed money from his friends and families and lent it to Nelco. He promised Nelco to charge less than and pay his acquaintances more than the interest rates prevailing in the market. He earned returns with negligible investments.
Gradually, the company went on to provide bill discounting services. He spotted another opportunity wherein the international businesses who set up their units in India did not have enough funds to operate in India. On the other hand, there were few banks holding surplus funds. He facilitated the smooth flow of funds.
In December 1991, the company went public, and Uday’s dream of creating the financial services institution started to realize.
Kotak goes global and beyond...
It was in 1993 that his company went global. A company that he deeply admired, Goldman Sachs, signed a JV with Kotak for banking and securities. Dealing with Goldman Sachs helped him learn how to run a financial business.
By the end of the 1990s, he was one of the most respected names in Indian finance, and nearly every big deal came to his firm. Businessmen sought him out for financial advice, and any foreigner seeking to invest big money in India rang his doorbell before proceeding further.
In 2003, Kotak Mahindra Finance Ltd received a banking license from the Reserve Bank of India. He then transformed Kotak Capital Management Finance Ltd. into Kotak Mahindra Bank.
Just so you know -
Moreover, Uday ended the partnership with Goldman Sachs by acquiring its 25% stake in two subsidiaries for $72 million in 2006.
Kotak Mahindra Bank has evolved to provide several financial assistance such as asset reconstruction, insurance, commercial banking, investment banking, mutual funds, and more.
His companies have been recognized and presented with many awards. The man himself also has won numerous accolades.
In June 2014, he was named ‘Ernst & Young World Entrepreneur Of The Year.’
Ranked 8th in India’s 50 most powerful people in 2017.
‘E&Y World Entrepreneur’ in 2018.
‘Best CEO in Banking Sector’ at the Business Today Best CEO Awards 2019.
Lifetime Achievement Award at Magna Awards 2019 by Businessworld.
Uday Kotak - Current Status
Mr. Uday is currently the President of the Confederation of Indian Industry (CII). He is the Chairman of Infrastructure Leasing & Financial Services Limited (IL&FS). He is also a committee member of the Primary Market Advisory high-level Committee of the Securities & Exchange Board of India. Apart from these, he even now holds the position of the CEO and MD of the Kotak Mahindra Bank.
What once started as a simple company with 3 members that lent and borrowed money has now turned into a group with more than 5,000 employees and consisting of companies including Kotak Securities, Kotak Mahindra Capital, Kotak Mahindra mutual funds, Kotak Mahindra Investments, Kotak Mahindra Prime, Kotak Mahindra general insurance, Kotak investment advisors and Kotak AMC.
The now Indian billionaire Banker managed to gracefully sail through all the crises that the banking sector suffered from, in the past few decades.
He might be a true example of “everything happens for a reason”. Had he not met with the accident and been operated on, he would have grown up to become a cricketer, and maybe the country would have been devoid of the revolution that he and his companies have created.
Uday strongly believes that his success is backed up by 3 components and is also a learning for all of us. One, concentrate on substance and not the form. Two, believe in the value system and not just the profits. Three, recognize the importance of process over creativity.
Anyway, what, according to you, is the biggest learning from this legend’s life? Tell us in the comments below.