MUMBAI: Madison Media, part of the Rs 5.5 billion Madison Communications, has bagged the media account of Kotak Mahindra, one of India’s leading financial institutions that offers diverse finance solutions, with immediate effect.

Madison Media emerged winner in a hotly contested pitch in which leading media specialists such as Starcom and Mediacom participated. Madison Media's CMD Sam Balsara states: " The finance sector has seen a surge in advertising activity and the need to stretch the rupee and get more bang for the buck has never been felt more, in this sector. I am particularly pleased that Madison Media has been chosen to meet this challenge." The release also states that Kotak Mahindra Group is expected to foray into a new area which is likely to take its media spends substantially. Sources claim that the new area is Kotak Mahindra group's transition into a universal bank.

In February 2002, Kotak Mahindra Finance (KMFL) received Reserve Bank of India's clearance to convert itself into a full-fledged universal bank before March 2003. The company will begin operations as a commercial bank soon with an initial capital of Rs 2 billion. The non-banking finance company has no plans to raise fresh capital after becoming a bank. Kotak Mahindra group's net worth is over Rs 9.3 billion and it services a customer base of nearly 5,00,000. Kotak Mahindra offers several services: corporate finance, retail finance to investment banking, mutual fund, to life insurance. Madison Media's COO (West) Punitha Arumugam who led the pitch says that her team will make media a key driver to build the various brands of the Kotak Mahindra Group.

Media reports indicate that the company will have a net worth of Rs 5.50 billion All the companies in the Kotak Mahindra group that offer allied financial services will become subsidiaries of the new bank.

The subsidiaries include Kotak Mahindra Asset Management Co, Kotak Mahindra Primus, which is a car-finance joint venture between Kotak Mahindra and Ford Credit, Kotak Mahindra Capital Co, Kotak Mahindra Securities, both of which are joint ventures between Kotak Mahindra and Goldman Sachs.

The company's core businesses will be the focus of the bank too. KMFL is also active in commercial vehicle finance, personal loans and asset reconstruction. The new bank will be an important channel for the distribution of Om Kotak Mahindra Life Insurance's products.

However, the insurance business of Om Kotak Mahindra is scheduled to move to Madison Media from 1 April 2003. Om Kotak Mahindra had a budget in excess of Rs 150 million.

Kotak Mahindra has international partnerships with Goldman Sachs (one of the world’s largest investment banks and brokerage firms), Ford Credit (one of the world’s largest dedicated automobile financiers) and Old Mutual (a large insurance, banking and asset management conglomerate).

Madison Media already handles a number of prestigious clients such as Coca Cola, P&G, Godrej Consumer Products, Godrej Sara Lee, Kinetic, Maruti Udyog, BPL, Zee's Playwin, Ozone Pharma, Top Ranen and IFB. Madison Communications has specialised units in creative, media, public relations, rural, outdoor and merchandising.