Why Axis Bank Shares Are Falling Today

Shares of Axis Bank experienced a decline on early Wednesday following a significant pre-market block deal. In this transaction, about 3.1 crore shares changed hands at ₹1,120 each, amounting to nearly ₹3,465 crore.

What Happened? The identities of buyers and sellers remain undisclosed, but media reports suggest BC Asia Investments VII, BC Asia Investments III, and Integral Investments South Asia IV as probable sellers. This deal includes a 90-day lock-in period.

In its second-quarter update, Axis Bank reported a 10% year-on-year increase in net profit, reaching ₹5,864 crore. This growth was fueled by a 19% year-on-year rise in net interest income and controlled provisions, despite high operational expenses.

The bank’s asset quality saw improvement, with the gross non-performing asset ratio decreasing to 1.73% and the net non-performing asset ratio dropping to 0.36%. The quarter’s operating profit rose by 12% year-on-year to ₹8,632 crore.

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Axis Bank’s capital adequacy ratio reached a 20-quarter high at 93.9%, with the net interest margin improving to 4.11%. Provisions for the quarter were at ₹815 crore, with specific loan loss provisions at ₹1,010 crore. The bank did not use any COVID-19 provisions during the quarter and holds cumulative provisions of ₹11,758 crore.

Total deposits grew by 18% year-on-year, with savings account deposits up by 16%, current account deposits by 7%, and term deposits by 22%. The bank’s advances increased by 23% year-on-year to ₹8.97 lakh crore, with domestic net loans and retail loans both growing significantly.

Price Action: Axis Bank Ltd. shares were trading 1.28% lower at ₹1,116.50 on Wednesday, shortly after market open.

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