Kotak Mahindra Bank plummets 13% after RBI’s intervention, mcap slips to ₹3.19 lakh crore

Sneha Sengupta — Fri, 26 Apr 2024 16:15:38 +0000

The Reserve Bank of India (RBI) has prohibited Kotak Mahindra Bank from accepting new clients till further notice due to “serious deficiencies” in the private lender’s IT infrastructure. As a result, the stock of the bank has plummeted by over 13 percent. With its market capitalization (mcap) dropping to ₹3.19 lakh crore in just two days, Kotak Mahindra Bank has lost its position as the fourth-largest lender in India.

However, with a market capitalization of ₹3.48 lakh crore and a share price increase of about 5% following strong March quarter results, Axis Bank has surpassed Kotak Mahindra Bank to take the fourth spot as India’s largest lender.

In the January-March quarter, Axis Bank posted a net profit of ₹7,130 crore, up from a loss of ₹5,728.4 crore during the same period the previous year.

Net interest income (NII), which is the difference between interest collected and paid by private sector lenders, increased 11.5% year over year (YoY) to ₹13,089 crore in the quarter under review from ₹11,742 crore in the corresponding period last year.

With a market capitalization of ₹11.5 lakh crore, HDFC Bank leads the lenders, trailed by ICICI Bank at ₹7.78 lakh crore and SBI at ₹6.99 lakh crore. As of right now, Axis Bank is ranked fourth, with Kotak Mahindra Bank coming in at number five. Among the other major bank stocks on Thursday, Kotak was the only lender to go negative during the session.

Paytm’s share price witnesses a 5% boost post shifting nodal account to Axis Bank

Sneha Sengupta — Mon, 19 Feb 2024 05:14:36 +0000

The Paytm share price surged by 5% to reach ₹358.55 in opening trades on Monday, February 19, following the announcement on Friday by its parent company One97 Communications that Paytm has moved its nodal account to Axis Bank (by opening an escrow account).

Merchants will be able to continue accepting digital payments using the Paytm card machine or QR code with a change to the nodal account setup.

Additionally, the Reserve Bank of India declared on Friday that the original deadline of February 29 for Paytm Payments Bank would now be extended till March 15. A few limitations that were put in place on January 31 are covered by this extension.

The purpose of this modification is to allay worries about possible suspensions of merchant payments.

The deadline for terminating deposit transactions at Paytm Payments Bank, a division of One 97 Communications, which operates the digital payments company Paytm, was extended by the Reserve Bank of India (RBI) on Friday by 15 days. Clients can now deposit funds into their accounts, wallets, FASTags, and prepaid cards through March 15th.

In the meantime, Paytm has been given a “outperform” rating by brokerage company Bernstein, with a target price of ₹600 per share.

However, after the RBI took action against Paytm Payments Bank this month, the stock has been under intense selling pressure. With the stock now trading at ₹358.55, it has lost 53% of its value thus far in February.

Pending a slowdown in the news surrounding One 97 Communications, Jefferies Financial Group Inc. has become the first significant international brokerage to discontinue coverage of the company, according to a Bloomberg article.

In the previous session, Paytm’s share price also saw a 5% boost.

“Without a banking license, Paytm’s business model will now become similar to pure payment service providers. Paytm’s focus will now move to ensuring customer retention, and we believe it will dip into its 85 billion rupees ($1 billion) cash reserves for spends on retaining users,” market analysts Jayant Kharote and Prakhar Sharma mentioned in a February 18 statement, as quoted by Bloomberg.

Axis Bank | Mango Bunch

Kotak Mahindra Bank plummets 13% after RBI’s intervention, mcap slips to ₹3.19 lakh crore

Paytm’s share price witnesses a 5% boost post shifting nodal account to Axis Bank