Axis Bank spurts 2% on acquiring Citigroup's Indian banking businesses

The private lender has acquired Citigroups' Indian consumer banking businesses, including credit cards, retail banking, wealth management and consumer loans in an all cash deal worth Rs 12,325 crore.

Axis Bank spurted nearly 2 per cent to a high of Rs 763.90 in Thursday's intra-day trade on the back of acquiring Citigroup's Indian consumer banking businesses, in an all-cash deal worth Rs 12,325 crore. The stock, however, pared gains and was up 0.4 per cent at Rs 532 as of 09:22 AM, while the BSE Sensex moved 0.1 per cent higher to 58,764.

The stock has gained 20 per cent in the last 17 trading sessions from an intra-day low of Rs 637 touched on March 08, 2022. During the same period, the BSE benchmark has appreciated by 12.5 per cent.

As per the Citi deal, Axis Bank has acquired the former's Indian businesses, including credit cards, retail banking, wealth management and consumer loans and transfer of about 3,600 Citi employees to Axis. The deal is expected to close in the first half of the 2023 calendar year. The sale excludes Citi's institutional client businesses in India. 

Axis Bank is the fourth-largest issuer of credit cards with a total base of 8.6 million cards and the deal will add about 2.5 million credit cardholders, making it one of the top three cards businesses in the country, the bank said in a separate statement.

"Valuable addition of Rs 1.11 trillion AUM from Citi Wealth & Private Banking products to augment and reinforce Axis' Burgundy brand, making it the 3rd largest by combined AUM in the wealth management space," the release added.

While the Citi deal can perk up Axis Bank's prospects owing to cheaper-than-expected valuation for the above-average customer franchise; extracting synergies, smooth integration were some of the key challenges for Axis Bank. READ FULL ANALYSIS

Tech View

Axis Bank
Target: 807
Support:749

Axis Bank's stock seems to be facing some stiff resistance at the higher end of the Bollinger Band, placed at Rs 767 level on the daily charts. If the stock is able to conquer this hurdle, it may extend its rally towards Rs 807. The immediate support for the stock is placed at Rs 749, its 50-day moving average (DMA), followed by Rs 725 - its 100-DMA.

The stock, however, is likely to exhibit a sideways movement in the immediate term as indicated by the momentum oscillators on the daily charts. The 14-day Relative Strength Index (RSI) is comfortaly below the overbought zone, but the Directional Index (DI), and slow Stochastic are showing congestion for the stock ahead. The MACD, however, has shown a positive crossover, suggesting overall positive trend in the stock.

(With inputs from Nikita Vashisht)