As non-retail investors begin to amass for a government share, Axis Bank is down 3%.
On November 10, when non-retail investors began placing bids for the government’s offer-for-sale (OFS) of a 1.55 percent interest in the private lender, Axis Bank’s share price dropped by 3 percent. The stock price on the National Stock Exchange at 11 o’clock was Rs 848.10 per share, down 2.93 percent. The OFS’s non-retail category saw a 4% subscriber increase at the same time.
Against an authorized capital of 4.18 crore shares, the category has collected bids for 16 million equity shares. On November 9, Axis Bank notified the exchanges that government would purchase 4.65 crore shares at a minimum price of Rs 830.63 through the Body Corporate of the India Unit Trust of India, or SUUTI.
The OFS is only available to non-retail investors on November 10, 2022, and retail investors and non-retail investors, including those who wish to carry forward their unallocated bids, are allowed to participate on November 11.
It was added that the seller’s brokers are ICICI Equities, Citigroup Global Markets India, and Morgan Stanley India. The government intends to receive Rs 4,000 crore from this deal and sell its holding in Axis Bank. Bain Capital, a prominent US-based private equity company, sold its 0.54 percent share in Axis Bank worth Rs 1,487 crore in an open market transaction a week earlier.
Notably, Axis Bank had a successful quarter in the third quarter of 2022, with its operating earnings increasing by 70% every year at Rs 5,330 crores. The bank’s net interest income increased year over year by 31% to Rs 10,360.3 crore, while the net interest income was 3.96 percent, up 57 basis points.
Forty-six experts have “buy” predictions on the stock, four have “hold” calls, and there are no “sell” calls, according to Bloomberg data. Non-retail investors may submit their bids on Thursday, the day before the government’s stake auction in Axis Bank begins; on Friday, only new buyers will be allowed to submit proposals.
The share sale brokers are ICICI Securities Ltd, Citigroup World Markets Pvt . Ltd., & Morgan Stanley Indian Company Private Limited. According to the filing, ICICI Securities is serving to be the settlement broker.
The trust stated clearly there were no intentions to sell additional shares of the diverse conglomerate in the midst of speculation concerning what would happen to SUUTI’s investment in ITC. In ITC, as of September 2022, SUUTI had a 7.87 percent ownership, worth Rs 34,140 crore at the time at the company’s market price.
The last time SUUTI reduced its ownership of ITC was in February 2017, as 2% stock was sold for Rs 291.95 a share. Over the previous four years, SUUTI has consistently held the same amount of shares in ITC.
“QFY23 sees the emergence of sequentially amazing NII (Rs104bn; 17% YoY & 6% QoQ) and 30% consecutive growth in net profit at Rs53bn,” LKP Securities wrote in its buy rating and price target assignment for Axis. The good standard property coverage (1.4% of total loans) is expected to absorb missed payments from restructuring. Thus the future forecast for asset values is at a tolerable level.
We advise a BUY in light of the adequate covid buffer, hints of growth rejuvenation, and reasonable restructuring pool, according to LKP Securities. According to the sell holdings of options traders, the current month’s spread for the stock is between 800 and 900.
The third-largest private enterprise bank in India is Axis Bank. Large and mid-sized corporations, SME businesses, agricultural enterprises, and retail businesses are just a few of the customer sectors that Axis Bank serves. As of December 31, 2021, Axis Bank has a worldwide network of 4,700 branches across the countries (including extension counters) & 11,060 ATMs dispersed across 2,665 locations.
This allowed the bank to serve a wide range of customers with a wide options of goods and services. Reliance Mutual Funds, Axis Securities Company Limited, Axis Financing, Axis Trustees, Axis Capital, A.TReDS Company limited, Freecharge, and the Axis Bank Foundation are all part of the Axis Group.
edited and proofread by nikita sharma