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Business News/ Markets / Uday Kotak loses 10,225 crore in a day as Kotak Mahindra Bank share price tanks 11%
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Uday Kotak loses ₹10,225 crore in a day as Kotak Mahindra Bank share price tanks 11%

Stock Market Today: Kotak Mahindra Bank's share price saw a steep fall of 10.85 per cent to close at ₹1,643 on the BSE on Thursday following curbs by the RBI. As the market cap fell making shareholders poorer by ₹39,768.36 crore, Uday Kotak lost ₹10,225 crore in a day.

Kotak Mahindra Bank's share price declined 10.85 per cent on Thursday following curbs by the RBI.Premium
Kotak Mahindra Bank's share price declined 10.85 per cent on Thursday following curbs by the RBI.

Stock Market Today: Kotak Mahindra Bank's share price saw a steep fall of 10.85 per cent to close at 1,643 on the BSE on Thursday. The share price plunged after the Reserve Bank of India (RBI) barred the private sector lender from onboarding new customers online and through mobile banking, citing supervisory concerns over its technology platforms.

The sharp decline in Kotak Mahindra Bank's share price has wiped out a significant portion of its market cap, leaving shareholders poorer by 39,768.36 crore. 

Kotak Mahindra Bank's market capitalisation, which stood at 3,66,383.76 crore at the end of Wednesday, fell to 3,26,615.40 crore by the end of Thursday.

Uday Kotak, the billionaire founder who holds a 25.71 per cent stake in Kotak Mahindra Bank, lost around 10,225 crore of his wealth in a day.

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Among other shareholders, mutual funds hold around 12.82 per cent stake in Kotak Mahindra Bank. The sharp decline in the share prices means mutual funds have likely lost more than 5,000 crore.

Insurance companies hold an 8.69 per cent stake with Life Insurance Corporation of India holding a 6.46 per cent share in Kotak Mahindra Bank. The decline in the bank's share price will result in insurance companies losing about 3,456 crore. Life Insurance Corporation of India has become poorer by about 2,569 crore with the correction in the share price.

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Since the central bank's action on Kotak Mahindra Bank entails a ban on onboarding new customers via all online channels, any online banking products offered to prospective new bank customers will have to be discontinued until the ban is lifted, experts say.

Analysts have been tweaking their target price of the stock as they expect an impact on the earnings growth. Analysts at Emkay Global Financial Services have cut their March 2025 estimated target price to 1,750 per share from 1,950 earlier. 

This means the upside for Kotak Mahindra Bank's share price in the near term may remain muted, limiting gains for all inventors.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 25 Apr 2024, 04:40 PM IST
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