Shares of Axis Bank witnessed choppy trade on Tuesday amid a report that Bain Capital is looking to sell its remaining holding in the private lender via a block deal today. The U.S.-based private equity firm is expected to raise around $430 million (₹3,580 crore) through stake sale at an offer price in the range of ₹1,071- ₹1,076.05 per share, a discount of 0% to 0.47% to previous day closing price.

Reacting to the news, Axis Bank shares opened higher at ₹1,094, up 1.7% against the previous closing price of ₹1,075.20 on the BSE. The banking heavyweight, however, soon slipped into negative terrain, falling over 2% from its opening high to ₹1,071.35 level. On the volume front, more than 3.3 crore shares changed hands over the counter, while the market capitalisation stood at ₹3.31 lakh crore.  

At the current price, Axis Bank shares have been trading 7% lower than its 52-week high of ₹1,151.50 touched on December 5, 2023, and 27% higher than its 52-week low of ₹844.05 hit on April 10, 2023. The stock has given 27% returns to its shareholders in the last one year and 8% in six months. In the calendar year 2024, the stock fell nearly 2% as investors booked profit at higher levels, while it shed over 2% in a month.

In November 2017, a consortium led by Bain Capital invested $1.8 billion into Axis Bank, which is touted to be one of the largest private equity investments in the Indian banking sector. As part of the investment, the Boston-headquartered investment firm injected around ₹6,854 crore at ₹525 per share in the Indian lender.

Over the years, the private equity firm has been diluting its stake in tranches. In December 2023, the firm through its various arms sold 1.1% stake in a deal worth over ₹3,400 crore, followed by 0.7% holding at an average price of ₹968 per share, amounting to ₹2,178 crore, in June 2023.

In the third quarter ended December 31, 2023, Axis Bank reported 4% year-on-year rise in net profit to ₹6,071 crore. Sequentially, the profit increased by 3.5% as compared to previous quarter at ₹5,863.56 crore in Q2 FY24, mainly due to increase in provisions and contingencies by 26.2% QoQ. The bank made an additional provision of ₹182 Cr relating to alternative investment funds (AIF).

The bank’s net interest income (NII), the difference between the interest earned and the interest paid, grew by 9% YoY to ₹12,532, crore, while the net interest margin (NIM) for the quarter was at 4.01%.

On the asset quality front, Axis Bank’s gross non-performing asset (NPA) improved to 1.58% in Q3 FY24, from 2.38% registered in the same quarter last year. The net NPA for the quarter was flat at 0.36% on a YoY basis.

In Q3 FY24, Axis Bank reported advances growth of 3.9% QoQ at ₹19.3 lakh crore, which was led by retail and SME segments posting a growth of 5% QoQ and 4% QoQ, respectively. During the quarter, deposits increased by 5.2% QoQ to ₹10 lakh crore, driven mainly by term deposits while CASA growth remained muted.

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