Kotak Mahindra Bank has now become the second largest bank in India, in terms of market capitalisation. Kotak Mahindra Bank has left behind the largest public sector lender, SBI Bank, at a time when banking stocks are going through a turmoil post the financial fraud got reported in Punjab National Bank.
On Tuesday, Kotak Mahindra Bank continues to maintain the lead with the the market cap (free float) of Rs1.56 lakh crore against SBI’s market cap of Rs92,423 crore. HDFC Bank has the free float market cap of Rs 3.97 crore.
On Monday total market capitalisation of Kotak Mahindra Bank jumped to Rs 2.23 lakh crore to surpass SBI at Rs 2.22 lakh crore. HDFC Bank is the largest bank in terms of market value at Rs 5 crore. HDFC Bank is currently trading at Rs1942.
With two private banks-ICICI Bank and Axis Bank – in the middling of controversies, Kotak Bank has been turning a favourite in the banking space. State Bank of India has slipped to the third position now.
Recently a report by Nomura made a case why it is the right time for Kotak Mahindra Bank to make a bid for Axis Bank. “For Kotak Bank, it is an opportune time… as Axis Bank has ramped up on the NPA recognition process and we believe the majority of the bad news is now known. (Also) since the time of the last merger talks, Kotak Bank’s stock has outperformed Axis Bank’s by around 30 per cent, making the acquisition more reasonable.”
According to Nomura, the acquisition can make the combined entity the second-largest private bank after HDFC Bank in terms of advances and also absolute CASA, and largest in terms of number of branches. The report also states that it is the opportune time as Axis Bank has stepped on the NPA recognition process suggesting that majority of the bad news is already known. The loan book of Axis Bank is more than twice in size of Kotak Mahindra Bank.