Mumbai: Shares of Karnataka Bank Ltd rose 7.38% on BSE on Monday amid talks that the Mangalore-based lender may be taken over by rival private sector bank Kotak Mahindra Bank Ltd. Executives at both banks denied this.
“Such fluctuations in the stock market are normal. This has nothing to do with any acquisition rumours,” said C. Ananthakrishnan, non-executive chairman at Karnataka Bank. A Kotak Bank spokesman also denied the talk.
Traded volumes of Karnataka Bank stock on Monday were close to four times the two-week average with almost 2.1 million shares changing hands.
The shares closed at Rs 156.45 apiece, while BSE’s benchmark index, Sensex gained 0.5% to close at 19,673.64 points. The banking index, Bankex, fell 0.01% to close at 14182.29 points.
To be sure, talk of larger private banks trying to buy a controlling stake in Karnataka Bank isn’t new. In October 2012, The Indian Express newspaper reported that ICICI Bank Ltd had submitted a formal proposal to the Reserve Bank of India (RBI) to acquire Karnataka Bank.
Kotak Mahindra Bank had also evinced interest according to that report, which both banks denied. On Monday shares of Kotak Bank lost 1.49% to close at Rs 712.15 each.
Kotak Mahindra’s market capitalisation at Rs.53,117 crore is higher than Rs.2,946 crore of Karnataka Bank.