Axis Bank Ltd. board on Wednesday approved the proposal to infuse Rs 1,500 crore as growth capital in Axis Finance Ltd. via a rights issue. The cash investment will be made in one or more tranches by March 2027, according to a stock exchange filing.
AFL is the consumer lending subsidiary of the private lender, with assets under management of Rs 41,583 crore as of March 31, 2025. The retail portfolio of products includes loan against property, home loan, personal loan, and business loan. The company's wholesale lending portfolio encompasses a range of financial solutions including corporate loans, collateralised loans, and real estate financing.
According to a Reuters report, Axis Bank was rethinking a stake sale in AFL after the Reserve Bank of India eased its rules on overlapping activities between banks and their subsidiaries, directing lenders to ring-fence such operations from their core banking business.
The RBI rules would have likely forced large banks, including HDFC Bank Ltd. and ICICI Bank Ltd. to either merge or divest NBFC businesses held as subsidiaries.
Axis Bank has invested Rs 2,375 crore in Axis Finance over the past decade.
Axis Bank Share Price Movement
Axis Bank share price traded 1.65 higher on the NSE, compared to a 0.9% advance in the Nifty 50. The stock is up 19% in the last 12 months and down 2% year-to-date.
Out of the 50 analysts tracking Axis Bank, 47 have a 'buy' rating on the stock, two recommend a 'hold' and one suggests a 'sell', according to Bloomberg data. The average of 12-month analyst price targets is Rs 1502, which implies a potential upside of 21%.
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