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Axis Bank to sell entire stake in securities depository firm NSDL

08 February, 2018

Axis Bank Ltd, India’s third-largest private-sector lender by assets, has agreed to divest its entire stake in National Securities Depository Ltd (NSDL) for Rs 165 crore ($25.66 million) in cash.

Axis Bank will sell 2 million shares of NSDL, or a 5% stake, at Rs 825 apiece, the lender informed stock exchanges on Thursday. It didn’t say who the buyer was. The sale is subject to various approvals, it said.

The bank didn’t specify any reason for selling its stake in the securities depository firm. However, the move appears to be part of its strategy to exit non-core investments, shore up its capital base and improve asset quality.

Axis Bank had raised Rs 11,626 crore ($1.8 billion) in November 2017 from institutional investors, including US-based alternative investment firm Bain Capital, state-run Life Insurance Corporation and investment management firm Capital Group.

The fund infusion followed its July-September earnings, which showed a rise in non-performing assets (NPAs). The stock had tanked 15% reacting to mounting bad loans and its earnings report.

The bank reported improvement in its loan book for the three months ended December 2017. Its gross NPAs reduced to 5.28% of total loans outstanding in December 2017 from 5.90% in the preceding quarter while net profit jumped 68% to Rs 726 crore.

On Thursday, Axis Bank’s shares ended up 1.75% on the BSE to close at Rs 568.50.

Meanwhile, Axis Bank isn’t the only one exiting NSDL. In December 2017, state-owned IDBI Bank had sold 7.99 lakh NSDL shares for an undisclosed amount, the lender had informed stock exchanges. The sale was part of IDBI Bank’s efforts to sell all non-core investments.

IDBI Bank held a 30% stake, or 1.2 million shares, in NSDL as of March 2017, showed NSDL’s annual report. The National Stock Exchange, the country’s largest bourse, owned a 24% stake, the annual report showed.

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Axis Bank to sell entire stake in securities depository firm NSDL

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