Bank Stocks In Focus: Kotak Mahindra Bank, Bandhan Bank Shares Trade Higher

Shares of Kotak Mahindra Bank Ltd. and Bandhan Bank Ltd. rose during early trade on Tuesday, amid a broader rally on Dalal Street.

Bandhan Bank could be exploring a change of control by putting the bank on the block, NDTV Profit reported on Monday. Sources said the promoters could be in the process of hiring an investment bank to kickstart the sale process. Promoter group entities own 39.74% stake in the Kolkata-based lender.

A spokesperson told NDTV Profit the bank is not aware of any such development, and has not received any communication in this regard.

On Tuesday, Kotak Mahindra Bank Chief Executive Officer Ashok Vaswani said the lender is on the lookout for acquisitions as it seeks to deploy its excess capital to scale up amid a transformation of India's financial industry. The bank is open to evaluating potential targets that would advance its strategy. The firm has the capacity to do jumbo deals, he added, in response to a question on whether transactions above $1 billion are possible, according to a Bloomberg News report.

"Kotak today carries significantly more capital than what regulators require," he said in an interview. "We're not going to waste that capital." The Mumbai-based bank looks at three criteria when studying M&A — whether it adds to its agenda, if the valuation makes sense and the cost of management distraction, according to Vaswani.

ALSO READ: Kotak Mahindra Bank Open To Deals As CEO Vasvani Touts Large Capital

Share Price Movement

Bandhan Bank share price rose as much as 2.3% and Kotak Mahindra Bank gained 1.9% after the news. The benchmark Nifty 50 was up 0.3% and the Nifty Bank surged 0.7%.

Bandhan Bank stock is up 18% in the last 12 months while Kotak has been flat.

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