Axis Bank spurts on buzz of PE firm in talks to pickup stake

Axis Bank surged 7.89% to Rs 522.50 at 14:30 IST on BSE after reports suggested that private equity firm, Bain Capital is in advanced talks with the bank to invest between $750 million and $1 billion.

Meanwhile, the S&P BSE Sensex was down 27.87 points or 0.1% at 33,233.05.

High volumes were witnessed on the counter. On the BSE, 19.49 lakh shares were traded on the counter so far as against the average daily volumes of 6.37 lakh shares in the past one quarter. The stock had hit a high of Rs 529 and a low of Rs 492.60 so far during the day. The stock had hit a 52-week high of Rs 547 on 25 July 2017 and a 52-week low of Rs 424.60 on 10 January 2017.

The large-cap bank has equity capital of Rs 479.56 crore. Face value per share is Rs 2.

As per reports, Bain Capital is in advanced talks with the bank to invest between $750 million and $1 billion (Rs 4800-6400 crore), in what could be one of the largest private equity investments in the Indian banking sector.

The bank is in talks to raise money amidst worsening asset quality and regulatory glare.

Bain's proposed investment will come as a primary issuance of shares through a preferential allotment that will allow the PE fund to own up to 5% of the bank.

The transaction will help Axis meet capital requirements for the medium term as competition intensifies in Indian banking, report added.

The bank's gross non-performing assets (NPAs) rose to Rs 27402.32 crore as on 30 September 2017 from Rs 22030.87 crore as on 30 June 2017 and Rs 16378.65 crore as on 30 September 2016. The ratio of gross NPAs to gross advances rose to 5.9% as on 30 September 2017 from 5.03% as on 30 June 2017 and 4.17% as on 30 September 2016. The ratio of net NPAs to net advances rose to 3.12% as on 30 September 2017 from 2.3% as on 30 June 2017 and 2.02% as on 30 September 2016.

Axis Bank's net profit rose 35.5% to Rs 432.38 crore on 0.9% increase in total income to Rs 13820.62 crore in Q2 September 2017 over Q2 September 2016.

Axis Bank is one of the biggest private sector banks in India.

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