Stocks

Why IndusInd Bank rallied 30% in early trade on Thursday

PALAK SHAH Mumbai | Updated on March 26, 2020 Published on March 26, 2020

 

The share price of IndusInd Bank, which had been falling consistently on market fears that the bank witness the same fate as Yes Bank, gained 30 per cent in less than one hour of Thursday’s trading session. Among the key reasons that market players say for the bank to rise is that selling by large foreign portfolio investors has subsided and promoters have sought RBI permission to raise their stake in the bank.

As per exchange data, Europacific Growth Fund has sold 35.8 lakh shares of IndusInd Bank at an average price of Rs 298.83 per share on Wednesday. Markets are anticipating that these shares were picked up by promoter linked entities, sources in foreign brokerage house said.

Promoter holding in IndusInd Bank is currently 14.39 per cent. But market players say they are expecting RBI to allow the promoters to hike their stake in Indusind bank in line with the treatment they gave to promoters of Kotak Mahindra Bank this year. Kotak Bank promoters have cancelled voting rights on the part holding of their equity, an arrangement that was allowed by RBI. Promoter holding in Kotak Mahindra Bank stood at near 30 per cent. The share price of IndusInd Bank rose to Rs 391 at around 10.30 am.

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Published on March 26, 2020
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