Kotak Mahindra Bank's market capitalisation (mcap) has shrunk to ₹3.19 lakh crore in two days, losing its rank as India's fourth largest lender.
HDFC Bank tops the lenders with a mcap of ₹11.5 lakh crore, followed by ICICI Bank with an mcap of ₹7.78 lakh crore and SBI at ₹6.99 lakh crore.
Axis Bank is now at the fourth position, followed by Kotak Mahindra Bank at the fifth rank so far.
Kotak Mahindra Bank shares tank 13% since RBI orderShares of Kotak Mahindra Bank hit back-to-back 52-week lows after the RBI announced its restrictions.
The central bank also clarified that even as the restrictions are in place, Kotak Mahindra Bank will continue to provide services to its existing bank customers, including its credit card customers.
Kotak Mahindra Bank shares have crashed almost 13 per cent since the Reserve Bank of India (RBI) barred the private-sector lender from onboarding any new customers till further notice, after finding ‘’serious deficiencies'' in its IT infrastructure. Kotak Mahindra Bank's market capitalisation (mcap) has shrunk to ₹3.19 lakh crore in two days, losing its rank as India's fourth largest lender.
On the other hand, Axis Bank has overtaken Kotak Mahindra Bank to become India's fourth largest bank as its market value has risen to ₹3.48 lakh crore after its shares jumped nearly five per cent on robust March quarter results.
Axis Bank reported a net profit of ₹7,130 crore in the January-March quarter, compared to a loss of ₹5,728.4 crore in the corresponding period last year. The private sector lender's net interest income (NII)-the difference between interest earned and paid-rose 11.5 per cent year-on-year (YoY) to ₹13,089 crore in the quarter-under-review, compared to ₹11,742 crore in the year-ago period.
Also Read: Uday Kotak loses ₹10,225 crore in a day as Kotak Mahindra Bank share price tanks 11%
HDFC Bank, ICICI Bank and State Bank of India (SBI) are the the top three most valuable banks of India by mcap. HDFC Bank tops the lenders with a mcap of ₹11.5 lakh crore, followed by ICICI Bank with an mcap of ₹7.78 lakh crore and SBI at ₹6.99 lakh crore. Axis Bank is now at the fourth position, followed by Kotak Mahindra Bank at the fifth rank so far. On Thursday, Kotak was the only lender trading lower during the session among the other bank majors.
Kotak Mahindra Bank shares tank 13% since RBI order
Shares of Kotak Mahindra Bank hit back-to-back 52-week lows after the RBI announced its restrictions. On Friday, shares settled 2.11 per cent lower at ₹1,608.40 apiece after hitting a 52-week low of ₹1,605.00 apiece on the BSE.
Also Read: RBI bars Kotak Bank from adding new customers; Your money in the bank is safe
According to Trendlyne data, Kotak Mahindra Bank's returns have been worse than Nifty 50 and Sensex in the past three months, six months, and one year. In the last one months, the returns ran into negative at 9.45 per cent and in the past one year, the returns stood at -14.86 per cent. Analysts have tweaked their target price of the stock as they expect an impact on the earnings growth.
Domestic brokerage firm Emkay Global Financial Services have cut their March 2025 estimated target price to ₹1,750 per share from ₹1,950 earlier. This means the upside for Kotak Mahindra Bank's share price in the near term may remain muted, limiting gains for all inventors.
RBI order against Kotak Mahindra Bank
In a restriction order on Wednesday, the RBI barred Kotak Mahindra Bank from onboarding new customers through its online portal and mobile app, and restricted it from issuing fresh credit cards, until further notice.
The RBI said it found “serious deficiencies and non-compliances" in IT inventory management, patch and change management, user access management, vendor risk management, and data security for 2022 and 2023.
The central bank also clarified that even as the restrictions are in place, Kotak Mahindra Bank will continue to provide services to its existing bank customers, including its credit card customers. “The bank has taken measures for adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest," a Kotak Mahindra Bank spokesperson said in a statement on Wednesday.
The curbs will be lifted once remediation of all deficiencies that may be pointed out in the external audit as well as the observations contained in the RBI inspections are fulfilled, to the satisfaction of the central bank. Kotak Mahindra Bank is scheduled to announce the consolidated and standalone audited financial results for the quarter and financial year ended March 31, on May 4.
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