Bank of Baroda overtakes IndusInd Bank in market cap; stock jumps 2%

State-owned Bank of Baroda (BoB) surpassed IndusInd Bank in market capitalisation (market-cap) ranking, after the sharp correction in the private sector lender's stock price.

At 10:34 am, BoB was up 2 per cent at Rs 62.90 with market-cap of Rs 29,063 crore, becoming the eighth largest bank by market cap. In comparison, IndusInd Bank, down 5.7 per cent to Rs 419, had market-cap of Rs 29,024 crore, BSE data shows.

In the last two weeks, IndusInd Bank's share price has tanked 59 per cent, after the private sector lender on March 7 announced a deferment of its plans to raise funds using additional tier-1 instruments. In comparison, BoB has outperformed the market, with 12 per cent fall, against 15 decline in the S&P BSE Sensex.

Thus far in the calendar year 2020, IndusInd Bank's share price has plunged 75 per cent from the level of Rs 1,511 on the BSE. The stock hit a multi-year low of Rs 383 on Wednesday, March 18, 2020 in intra-day trade.

In February, global rating agency Moody’s had revised the outlook on IndusInd Bank’s instrument to “negative” from “stable” to account for the risk of further asset quality deterioration. However, it affirmed ratings on foreign and domestic currency deposits, on the back of a strong capital base.

Over the last few quarters, the bank has seen a deterioration in its asset quality, particularly in the corporate segment. Tight refinancing conditions for borrowers were a key trigger for the crystallization of nonperforming loans (NPLs), the agency said.

Refinancing conditions remain tight, especially for weaker borrowers. In particular, the bank has a relatively higher exposure to real estate compared to other banks (at around 8 per cent of its loan book at December 31, 2019. While there have been no NPLs in this segment so far, this exposure to the property market remains a source of risk, given the broader stress in the real estate sector, it said.