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Axis Bank dips nearly 4% as govt initiates SUUTI's 1.55% stake sale via OFS

According to the lender's exchange filing, the government, via SUUTI, will offload 46.5 million shares on November 10, and 11. The floor price for the offer shall be Rs 830.63

Axis Bank
SI Reporter Mumbai
2 min read Last Updated : Nov 10 2022 | 9:38 AM IST
Shares of Axis Bank dipped nearly 4 per cent at Rs 843 on the BSE in Thursday's intra-day trade after the government, via Specified Undertaking of the Unit Trust of India (SUUTI), initiated sale of over 1 per cent stake in the company via offer for sale (OFS) route today.

According to the lender's exchange filing, the government, via SUUTI, will offload  46.5 million shares, representing 1.55 per cent stake, in the company on November 10, and 11. The floor price for the offer shall be Rs 830.63. READ FILING HERE

"The Specified Undertaking of the Unit Trust of India (SUUTI) proposes to sell up to 46.53 million equity shares representing up to 1.55% of the total issued and paid up equity share capital of Axis Bank, on November 10, 2022, for non-retail investors only and on November 11, 2022 for retail investors and for non-retail investors, including who choose to carry forward their un-allocated bids," as per the filing.

With the sale, the government would completely exit the private sector lender. The government, at the current market price, is expected to realise about Rs 4,000 crore from the share sale.

Meanwhile, in the past one month, Axis Bank has outperformed the market by surging 12 per cent as compared to 3.8 per cent rise in the S&P BSE Sensex. The stock had hit a record high of Rs 920 on October 27, 2022. At 09:20 AM, the stock was trading 2 per cent lower at Rs 855, as compared to 0.50 per cent decline in the S&P BSE Sensex.

ICICI Securities has a 'buy' rating on Axis Bank with a target price of Rs 1,000 per share. "Axis Bank’s stock has given around 1.7 times returns over past two years. Focus on risk adjusted business growth and improving margin trajectory to aid return ratios and sustainability of performance to drive valuation ahead," the brokerage firm said in its result update.

However, the acceleration in deposit mobilisation to keep margins at current level, are among key tiggers for future price performance. Efforts to keep cost to asset at 2-2.5 per cent and adequate cumulative provisions of 160 per cent of GNPA provide comfort on earnings volatility, the brokerage firm added.

Topics :Buzzing stocksAxis BankSuutiSUUTI stake saleMarkets

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