Kotak’s retail, institutional arms give ‘opposite’ ratings on Hero

MUMBAI: Opposite ratings on the stock of auto major Hero MotoCorp by the institutional and retail brokerage arms of the Kotak Group drew criticism from various sections of the market.

Kotak Institutional Equities in a report on Wednesday had rated Hero MotoCorp as a ‘sell’ with a target price of Rs 2,600 while the retail arm Kotak Private Client Group had retained accumulate rating on Hero MotoCorp and revised target price lower to Rs 3,217 from Rs 3,473.

On Thursday, a message which was doing the rounds on WhatsApp Groups read: “Kotak issues sell note for institutional clients and accumulate ratings on the same stock for the poor retail guys.”


A Kotak Mahindra Group spokesperson said that the reports by the two arms — Kotak Retail Research and Kotak Institutional Research — cater to different segments of investors and each report makes a disclosure to this effect.

“Kotak Securities has two independent equity research groups: Institutional Equities and Private Client Group. Views and opinions expressed in one report may or may not match or may be contrary with the views, estimates, rating, and target price of the report of the other segment,” said Rohit Rao, chief communication officer, Kotak Mahindra Group, said in a clarification.

“Each group operates independently. No investor is misled. Comparing the two is incorrect,” said Rao.