The Hindu Business Line : J&K Bank hits all-time high on stake sale talk

RUMOURS of J&K Bank being close to finalising a stake sale with a strategic partner saw the stock of the Srinagar-based private sector bank, hit an all-time high of Rs 487 on the BSE on Wednesday. The stock has appreciated by 341 per cent from a low of Rs 108 on March 25, 2003 to its current levels.

Brokers said that the on-again, off-again, rumour gained strength on Wednesday considering that it was close to the price target at which point the proposed deal is to take place. "There has been talk in the market that the deal could take place at Rs 500. That is reportedly the target set by the bank," a broker said. As per the market grapevine, the bank has in the past indicated that it would be looking to offload a 20 per cent stake in the bank to a strategic investor. Market sources maintain that operator interest at the counter has also been building up in anticipation of a dividend pay out by the company.

"The bank has been recording decent growth in business operations. However, in the past, their payouts have been abysmally low. This time there has been demand of an increased dividend payout. There is also talk that the company may consider issuing bonus shares," an analyst said. The board is to consider dividend payout at its next meeting.

Analysts maintain that the stock has been trading at a discount to some of the private sector banks. "This has largely been on account of it operating out of a troubled state. But that is all in the past and its valuations are looking up," an analyst said.

The stock ended the day at Rs 477, up 16.31 per cent, with around 8.15 lakh shares traded on the NSE. On the BSE, the stock closed at Rs 477, up 16.30 per cent, with around 3.18 lakh shares traded.

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