Axis Bank spurted 13.66% to Rs 911.50 at 14:04 IST on BSE after the bank said its total direct and indirect exposure to the National Spot Exchange is insignificant.
Meanwhile, the S&P BSE Sensex was up 351.05 points or 1.89% at 18,918.60.
The stock spurted on high volumes. On BSE, 12.14 lakh shares were traded in the counter as against average daily volume of 2.82 lakh shares in the past one quarter.
The stock hit a high of Rs 915 and a low of Rs 853.90 so far during the day. The stock hit a 52-week low of Rs 764 on Wednesday, 4 September 2013. The stock hit a 52-week high of Rs 1,549 on 20 May 2013.
The stock had underperformed the market over the past one month till 4 September 2013, sliding 27.35% compared with the Sensex's 3.11% fall. The scrip had also underperformed the market in past one quarter, declining 42.58% as against Sensex's 5% fall.
The large-cap private sector bank has equity capital of Rs 469.08 crore. Face value per share is Rs 10.
Axis Bank in a clarification to the stock exchanges also said that the bank has adequate collateral to back its exposure to the National Spot Exchange (NSEL). Axis Bank issued the clarification amid media reports that it and two other private sector banks viz. ICICI Bank and HDFC Bank have the highest exposure to NSEL.
NSEL, promoted by Jignesh Shah-led Financial Technologies (India), is facing the problem of settling Rs 5600 crore dues to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on July 31 on the government direction.
Another trigger for the rally in the Axis Bank counter was the removal of restrictions by the Reserve Bank of India (RBI) on foreign institutional investors (FIIs) on buying shares of Axis Bank as the overall foreign share holding in Axis Bank fell below the prescribed limit of 49%. Foreign share holding in Axis Bank under the portfolio investment scheme have gone below the prescribed threshold limit stipulated under the extant FDI Policy, the RBI said in a statement. Hence, the restrictions placed on the purchase of shares of Axis Bank are withdrawn with immediate effect, the central bank said.
Total foreign holding in Axis Bank was 48.96% as at 30 June 2013, of which 40.70% was held by FIIs.
Axis Bank's net profit jumped 22.14% to Rs 1408.93 crore on 15.87% increase in total income to Rs 9059.12 crore in Q1 June 2013 over Q1 June 2012.
Axis Bank is the third largest private sector bank in India. It has a large footprint of 1,947 domestic branches (including extension counters) and 11,245 ATMs spread across the country as on 31 March 2013. The bank also has overseas offices in Singapore, Hong Kong, Shanghai, Colombo, Dubai and Abu Dhabi.
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