IndusInd Bank shares jumped more than 4 per cent on Monday, as the private sector lender denied reports concerning a merger proposal. Kotak Mahindra Bank is exploring a takeover of IndusInd Bank, in a move that would create the country’s eighth-largest financial firm by assets, news agency Bloomberg had reported on Sunday citing people with knowledge of the matter. In a statement released late on Sunday, IndusInd Bank said it “denies the rumour in certain media reports concerning a merger proposal, and considers it to be malicious, untrue and baseless”.

Shares in IndusInd Bank – the country’s seventh largest lender by market value – jumped as much as 4.21 per cent to ₹ 633 apiece on the BSE, having opened stronger at ₹ 615.25 compared to their previous close of ₹ 607.45.

Kotak Mahindra founder and CEO Uday Kotak is looking at the possibility of an all-stock acquisition, Bloomberg had reported quoting one of the people. Uday Kotak and the Hinduja family had held initial talks over the proposal in which the founders of IndusInd Bank could retain a stake in the lender after a deal, according to the Bloomberg report.

The Mauritius-based IndusInd International Holdings, the promoter of Indusind Bank, denied the report, calling it a “rumour”. IndusInd International Holdings Limited (IIHL) said it considers the report “malicious, untrue and baseless”. IIHL is promoted by the Hindujas and other NRIs.

The promoter reiterated its full support to IndusInd Bank “now and always”. “The promoter would continue to support Indusind Bank’s initiatives to grow inorganically, should any such opportunities arise on the horizon in the future… The promoter reaffirms its unstinted support to Indusind Bank,” IIHL said.

At 10:10 am, the IndusInd Bank stock was up 2.47 per cent at ₹ 622.45 apiece on the bourse, outperforming the benchmark S&P BSE Sensex index which was down 0.15 per cent amid choppy trade.