$1.3 billion gone! Uday Kotak sees his wealth dip the most in 4 years after RBI torpedo
Due to a heavy selloff post the RBI directive, the bank’s founder Uday Kotak, the largest shareholder with a stake of almost 26%, saw his wealth decline by $1.3 billion.
- Apr 26, 2024,
- Updated Apr 26, 2024 7:40 AM IST
Uday Kotak's wealth saw a dip by $1.3 billion after RBI barred Kotak Mahindra Bank from adding new customers through its digital channels and from issuing fresh credit cards citing governance and risk issues about its technology systems.
Due to a heavy selloff post the RBI directive, the bank’s founder Uday Kotak, the largest shareholder with a stake of almost 26%, saw his wealth dip by $1.3 billion, according to the Bloomberg Billionaires Index. He was worth $14.4 billion as of April 24.
Brokerages see the RBI directive impacting bank’s growth as the majority of the new business is sourced via digital channels. “A lot of savings accounts opened through KMB’s 811 digital channel. On the asset side, a majority of sourcing of unsecured products (9.2 % mix ex-MFI) is done digitally. These segments have grown at 40% y-o-y (9MFY24) vs overall growth of 18% y-o-y,” Macquarie’s Suresh Ganapathy said in a note.
Kotak said in response that it has taken measures for “adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest.”
Riding on its March quarter results, Axis Bank pipped Kotak Mahindra Bank to become the fourth-largest lender in terms of market capitalisation.
Axis Bank shares were trading 4.70 per cent higher at Rs 1,113.65 on BSE, commanding a m-cap of Rs 3,42,488.70 crore. This was higher than Kotak Mahindra Bank's Rs 3,29,597.28 m-cap, post a steep fall following the RBI ban.
Kotak Mahindra Bank commanded Rs 3,66,383.76 crore m-cap on Wednesday. Axis Bank's m-cap stood at Rs 3,28,365.61 crore, the same day.
A couple of brokerages suggested upside potential for Axis Bank post quarterly earnings.
"Axis Bank reported moderate top-line as the margins improved, however, profitability showed healthy growth. Its assets continue to grow at a healthy pace and the management expect to report growth higher than the industry. Margins are expected to improve as the cost of funds is expected to normalise going ahead," said Religare Broking, which maintained 'Buy' rating on the stock with a target price of Rs 1,275 valuing the standalone bank at 1.7 times estimated FY26 book value.
Uday Kotak's wealth saw a dip by $1.3 billion after RBI barred Kotak Mahindra Bank from adding new customers through its digital channels and from issuing fresh credit cards citing governance and risk issues about its technology systems.
Due to a heavy selloff post the RBI directive, the bank’s founder Uday Kotak, the largest shareholder with a stake of almost 26%, saw his wealth dip by $1.3 billion, according to the Bloomberg Billionaires Index. He was worth $14.4 billion as of April 24.
Brokerages see the RBI directive impacting bank’s growth as the majority of the new business is sourced via digital channels. “A lot of savings accounts opened through KMB’s 811 digital channel. On the asset side, a majority of sourcing of unsecured products (9.2 % mix ex-MFI) is done digitally. These segments have grown at 40% y-o-y (9MFY24) vs overall growth of 18% y-o-y,” Macquarie’s Suresh Ganapathy said in a note.
Kotak said in response that it has taken measures for “adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest.”
Riding on its March quarter results, Axis Bank pipped Kotak Mahindra Bank to become the fourth-largest lender in terms of market capitalisation.
Axis Bank shares were trading 4.70 per cent higher at Rs 1,113.65 on BSE, commanding a m-cap of Rs 3,42,488.70 crore. This was higher than Kotak Mahindra Bank's Rs 3,29,597.28 m-cap, post a steep fall following the RBI ban.
Kotak Mahindra Bank commanded Rs 3,66,383.76 crore m-cap on Wednesday. Axis Bank's m-cap stood at Rs 3,28,365.61 crore, the same day.
A couple of brokerages suggested upside potential for Axis Bank post quarterly earnings.
"Axis Bank reported moderate top-line as the margins improved, however, profitability showed healthy growth. Its assets continue to grow at a healthy pace and the management expect to report growth higher than the industry. Margins are expected to improve as the cost of funds is expected to normalise going ahead," said Religare Broking, which maintained 'Buy' rating on the stock with a target price of Rs 1,275 valuing the standalone bank at 1.7 times estimated FY26 book value.