Axis Bank share price falls after ₹3,465 cr shares change hands at ₹1,120 via block deal

On December 13, Axis Bank's stock price dropped 1.6%, trading at ₹1118 per share, following a block deal involving approximately 3.1 crore shares valued at ₹3,465 crore, transacted at ₹1,120 per share. While the specific buyers and sellers weren't confirmed, reports hinted at entities linked to Bain Capital considering a stake offload.

The deal, executed at an offer floor price of ₹1,120 per share, represented a slight discount of 1% from the closing price of ₹1,131 on December 12. Reports suggest that entities associated with Bain Capital might be looking to sell their stake through this block deal. Probable sellers include BC Asia Investments VII, BC Asia Investments III, and Integral Investments South Asia IV.

Bain Capital's Involvement and Past Transactions

Earlier in June, Bain Capital sold a 0.7% stake in Axis Bank at an average price of ₹968 per share, totaling ₹2,178 crore. Preceding this, the firm divested a 1.2% stake in October 2022. Notably, back in November 2017, a consortium led by Bain Capital infused $1.8 billion into Axis Bank to fortify the lender's capital base at ₹525 per share, contributing approximately ₹6,854 crore.

Stock Performance

Over the past month, Axis Bank's stock has climbed 10%, outperforming the Bank Nifty index's 7% rise. The share price hit a 52-week high of ₹1,151 on December 5. Despite the banking sector's underperformance in 2023, Axis Bank stood out, showcasing returns of over 21% year-to-date, surpassing the benchmark. Over the last five years, people who invested in Axis Bank's shares have seen a really good return of 80%.

Financial Performance

In the September quarter, Axis Bank demonstrated robust financial performance with a 10% yoy increase in net profit, reaching ₹5,864 crore. This growth was primarily fueled by a healthy 19% yoy rise in net interest income (NII) and a 3% QoQ boost.

The gross non-performing asset (GNPA) ratio decreased to 1.73% from the previous quarter's 1.96%, while the net non-performing asset (NNPA) ratio dropped to 0.36% from 0.41% in the previous quarter.

Operating profit also witnessed an uptick, rising by 12% yoy to ₹8,632 crore. Axis Bank reported a capital adequacy ratio of 93.9%, the highest in the last 20 quarters, and an improved net interest margin (NIM) at 4.11%, up from 3.96% yoy and 4.1% QoQ.

The bank reported 18% yoy increase In its deposits. Specifically, savings account deposits rose by 16%, current account deposits by 7%, and total term deposits by 22% yoy.

On the lending front, Axis Bank's advances surged by 23% yoy, reaching ₹8.97 lakh crore as of September 30. Domestic net loans increased by 26% yoy, while retail loans observed a 23% yoy growth.