Shares of Axis Bank Ltd. traded 1.45 per cent up in Tuesday’s trade at 10:40AM (IST). Around 398010 shares changed hands on the counter. The stock opened at Rs 408.55 and touched an intraday high and low of Rs 414.85 and Rs 408.55, respectively, in the session so far. The 4.5% fall in Axis Bank’s shares has made it the top loser in the Nifty Bank index yesterday.
Hence, Axis bank is the top loser in the Nifty Bank index fcr yesterday. Rating cut to BB+ from BBB- while the outlook has been retained as stable. The ratings agency expects the asset quality of Indian banks to deteriorate, credit costs to rise and profitability to decline over the next 12 month.
As a result Investors were worried that the rating downgrade for Axis Bank and four other financial institutions will mean additional pain for these lenders. Already, it was labelled as junk by S & P. The rating agency said, “While Axis’ asset quality is superior to the Indian banking sector average, its level of non-performing assets (NPAs) will likely remain high compared to international peers,”.
While Axis Bank’s asset quality is superior to the Indian banking sector average, its level of non-performing assets will likely remain high compared to international peers, this is vital to be noted. Beyond this, however, there is no material effect on the bank. For one, the bank has not made any plans of raising capital from overseas. In fact, capital raising is likely to be through equity. Here, the bank’s operating performance comes into the picture.