Investors punish Axis
Mumbai: The shares of Axis Bank on Wednesday tanked nearly 10 per cent, wiping out over Rs 11,700 crore of investor wealth, after the private sector lender reported a sharp rise in bad loans during the quarter ended September 30.
On the BSE, the scrip ended with losses of 9.52 per cent, or Rs 48.85, at Rs 464.35 after dropping over 10 per cent during intra-day trades. Similarly, on the NSE, the shares dropped 9.48 per cent to close at Rs 464.50.
In terms of equity volume, 38.56 lakh shares of the company were traded on the BSE and over 4 crore shares changed hands on the NSE during the day. The stock was the worst performer among both the indices during the day.
Axis Bank, which declared its second-quarter numbers on Tuesday, reported higher gross non-performing assets (NPAs) that rose to Rs 27,402.32 crore against Rs 16,378.65 crore in the same period of last year. The percentage of gross NPAs also rose to 5.90 per cent of assets from 5.03 per cent on a sequential basis and 4.17 per cent in the year-ago period. The deterioration in its asset quality during the quarter came as slippages showed a rise.
This was largely on account of divergence with the RBI as regards the treatment of NPAs for the period ended March 31, 2017.
"After mild hopes of recovery in the last couple of quarters, Axis Bank's second-quarter performance was abysmal. The management's commentary post RBI's annual risk-based supervision points towards an additional stress of nearly Rs 40000 crore in 9 accounts. With the recognition of merely 6 per cent across the system, incremental stress is expected to weigh on corporate-tilted banks'', a note from HDFC Securities said.
There was nervousness in other banking counters as well with ICICI Bank and the SBI falling nearly four per cent and 2.77 per cent, respectively, as investors feared that these two lenders may also report a jump in their bad loans.
Shares of MAS Financial Services gained nearly 43 per cent in its debut trade today, over the issue price of Rs 459.
The stock listed at Rs 660, up 43.79 per cent from the issue price on the BSE. Intra-day, it zoomed 48.35 per cent to Rs 680.95. The scrip finally ended at Rs 654.75, up 42.64 per cent.