MUMBAI: Kolkata-based Bandhan Bank Ltd on Wednesday beat Indusind Bank Ltd to become the sixth most-valued bank in India.
Data from BSE showed Bandhan Bank had a market capitalization of ₹61043.37 crore, after its shares gained 1.3% on Wednesday.
On 25 February, Reserve Bank of India lifted the restrictions on Bandhan Bank on opening new branches without prior permission. In September 2018, RBI had barred the bank from opening new branches without its approval and ordered the bank to freeze the salary of its chief executive Chandra Shekhar Ghosh over its failure to meet shareholding rules.
Indusind Bank fell 5% to ₹860.80 with its market cap at ₹59840.85 crore. The lender has declined 42% so far this year.
HDFC Bank remained India's most-valued bank with market cap of ₹6.07 trillion, followed by Kotak Mahindra Bank ( ₹3.02 trillion), ICICI Bank Ltd ( ₹2.96 trillion), SBI ( ₹2.26 trln) and Axis Bank (1.76 trln)
Shares of Indusind Bank have been on a downtrend since Friday after the bank cancelled its plan to raise debt via sale of bonds citing current market conditions. This decision came in the backdrop of Reserve Bank of India stepping up to rescue Yes Bank Ltd.
Indusind Bank's stock also came under pressure after December quarter results showed deteriorating asset quality, with lumpy account and higher slippages in granular accounts. Analyst said its credit costs are likely to remain elevated as the bank intends to continue increasing provisions on IL&FS, DHFL and other lumpy accounts.
Analyst believes that the lender reported improved earnings but its exposure to potential stressed group and unlikely slippages from the sectors other than disclosed in the December quarter marred the overall performance. Asset quality of corporate book will remain an overhang in the near term, they said.
Recently, RBI approved the appointment of Sumant Kathpalia as managing director and CEO of the lender.
"The leadership change comes at a time when asset quality is taking a toll on IIB. Slippages from the retail and corporate portfolios (even outside of stressed groups) have increased. Uncertainty persists over when these slippages will peak given that the SMA book remains sticky at ~1% of advances. Also, material exposure to troubled telecom player Vodafone Idea remains an overhang," BoB Capital said in a note to its investors.