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Shares of Axis Bank Ltd rose as much as 4.8 per cent to Rs 676.50, their biggest intraday percentage gain in 5 weeks.
The lender had on Saturday appointed Amitabh Chaudhry as Managing Director & CEO from January 1, after incumbent Shikha Sharma steps down at the end of this year.
Chaudhry, currently the MD & CEO of HDFC Standard Life Insurance Company, has been appointed as MD and CEO for a period of 3 years, with effect from January 1, 2019 up to December 31, 2021.
“The board of directors of the bank at its meeting held today has taken on record the approval granted by the Reserve Bank of India (RBI) to the appointment of Amitabh Chaudhry as the Managing Director & CEO of the Bank, for a period of 3 years, with effect from January 1, 2019 up to December 31, 2021 (both days inclusive),” Axis Bank had said in a regulatory filing on Saturday.
Chaudhry will take over from Shikha Sharma after she demits office on December 31, 2018.
Nomura says the appointment marks the beginning of many transitions in the CEO role in private banks over the next 1-2 years. Chaudhry's appointment is very positive for Axis given his diverse experience and technology/innovation leadership that he aided HDFC Life to achieve, it adds.
The brokerage has maintained “buy” rating.
Citi says once Chaudhry assumes charge, probability of Axis getting into life insurance manufacturing goes up. Any changes that Chaudhry would want to implement once he assumes charge, like management changes or change in strategy, will take time to play out as Axis is a large bank, it adds.
Macquarie expects RBI's mandated top priority for Chaudhry would be to clean up the books and focus on resolving incumbent stress. This coupled with any potential change in top management, especially department heads, could see a decision-making vacuum, causing growth to take a back seat for a few quarters.
Macquarie has maintained “Outperform” rating with a price target of Rs 639.05, while Citi has maintained “neutral” rating with a price target of Rs 610. About 24 of 47 brokerages have rated the stock “buy” or higher, 16 ”hold” and 7 “sell” or lower, according to Thomson Reuters data.
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