Axis Bank overtook Kotak Mahindra Bank to become India’s third most valued private lender after a rout in the latter’s stock. Kotak Bank’s stock opened deep in the red last Thursday, a day after RBI restricted the lender from onboarding customers digitally and issuing credit cards, citing repeated failures to fix “serious deficiencies” in its IT system.
Kotak Bank shares closed 11% lower at Rs 1,643 apiece on the BSE. Its shareholders together lost nearly £4 bn as its market capitalisation fell to £33 bn. Axis Bank, with a market cap of £35 bn, replaced Kotak Bank as the fourth most valued lender in India. The top three in the pecking order are HDFC Bank (£115 bn), ICICI Bank (£78 bn) and state-owned SBI (£73 bn). The last time Axis Bank was valued more than Kotak Bank was in Sept 2016, Refinitiv data showed.
For the bank’s founder Uday Kotak, the crash resulted in a $1.2-billion wealth erosion. Kotak, former MD & vice-chairman of the bank, also the main promoter, currently holds 25.9% in the bank. As the bank’s market cap dipped, Kotak’s holding in the lender dipped by about £1.03 bn (about $1.2 billion) to £8.55 bn (about $10.2 billion), BSE data showed.
