Synopsis:
Kotak Mahindra Bank shares gained after a massive Rs. 6,256 crore block deal saw 3.22 crore shares traded at Rs. 1,941 apiece. The transaction, accounting for 1.62 percent of the bank’s equity, is linked to Sumitomo Mitsui’s stake sale as part of its planned Yes Bank acquisition.
The banking sector stock witnessed positive traction in Tuesday’s session after a large block deal boosted investor activity. Despite the stake sale by Sumitomo Mitsui, investor sentiment stayed upbeat with the stock edging higher intraday.
Kotak Mahindra Bank, with a market capitalization of Rs. 3,93,827 crore, opened at Rs. 1,990 and hit an intraday high of Rs. 1,990, the same as its opening price. Compared to the previous close of Rs. 1,959.65, the stock gained 1.55 percent at its peak.
What’s the News?
Kotak Mahindra Bank saw a massive trade in the block deal window, where about 3.22 crore shares worth Rs. 6,256 crore changed hands at Rs. 1,941 per share. The transaction represented around 1.62 percent of the bank’s outstanding equity across 31 blocks. Reports suggested that Sumitomo Mitsui was the seller, offloading a 1.65 percent stake to raise funds for its Yes Bank acquisition.
Last month, Sumitomo secured Reserve Bank of India’s nod to acquire up to 24.99 percent of Yes Bank. The RBI clarified that SMBC would not be treated as a “promoter,” exempting it from additional regulatory obligations.
Earlier this month, the Competition Commission of India (CCI) also cleared SMBC’s proposed stake purchase. In May, Yes Bank disclosed that SMBC would acquire a 20 percent stake for nearly Rs. 14,000 crore, marking the largest cross-border M&A deal in India’s financial sector.
The Japanese lender agreed to buy a 13.19 percent stake from State Bank of India and a combined 6.81 percent stake from Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and Kotak Mahindra Bank.
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Financial Snapshot
On a quarter-on-quarter basis, sales increased from Rs. 16,772 crore to Rs. 17,248 crore, a growth of 2.83 percent. Financing loss narrowed from a loss of Rs. 4,051 crore to a loss of Rs. 3,402 crore. Profit before tax declined from Rs. 6,351 crore to Rs. 6,053 crore, down 4.69 percent. Net profit fell from Rs. 4,933 crore to Rs. 4,472 crore, a decline of 9.32 percent.
On a year-on-year basis, sales rose from Rs. 15,837 crore to Rs. 17,248 crore, an increase of 8.91 percent. Financing loss slipped further from a loss of Rs. 3,231 crore to a loss of Rs. 3,402 crore. Profit before tax declined sharply from Rs. 9,811 crore to Rs. 6,053 crore, down 38.32 percent. Net profit also fell from Rs. 7,448 crore to Rs. 4,472 crore, a decline of 39.97 percent.
About the Company
Kotak Mahindra Bank is a leading diversified financial services group in India. It offers retail and corporate banking, treasury operations, investment banking, stock broking, and vehicle finance, alongside advisory services, asset management, and insurance solutions in both life and general categories.
Written By Manan Gangwar
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