Shares of Kotak Mahindra Bank today fell 1.1 per cent as HSBC has downgraded the stock to “neutral’’ from “overweight’’.
According to HSBC, merger between Kotak and ING Vysya should be value-accretive but valuations reflect higher Street expectations from the merger.
The stock is trading at 62 per cent premium to its own three-year average.
There could be larger integration challenges than what Street expects, HSBC says.
In November, Kotak had agreed to buy ING Vysya in record $2.4-bln share deal.