Axis Bank in focus after increment of FII limit

The Reserve Bank of India (RBI) has increased Foreign Institutional Investors' (FIIs') limit from 49 per cent to 62 per cent with effect from May 31. After approval of increase in FII limit, the share price of Axis Bank has increased by 2.7 per cent on bourses in early trades; and is trading at Rs 522.55 on an intraday basis.

RBI has also notified that the total foreign investment from all sources i.e. Foreign Institutional Investors (FII)/Registered Foreign Portfolios Investors (RFPIs)/Foreign Direct Investment (FDI)/Non-Resident Indians (NRI)/ Persons of Indian Origin (PIO)/American Depository Receipts (ADR)/Global Depository Receipts, (GDR) in the bank shall not exceed 62 per cent of paid up capital.

The Reserve Bank has stated that the company has passed resolutions at its board of directors’ level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges.

Considering latest quarterly result, Axis Bank’s top line stands at Rs 13593 crore in Q4FY16, an increase of 8 per cent on a quarterly basis. The Net Interest Income (NII) stands at Rs 4553 crore in last quarter compared to Rs 4162 crore in Q3FY16, an increase of 9 per cent. However, the net profit has fallen from Rs 2175 crore in Q3FY16 to Rs 2154 crore in this quarter, a decrease of 1 per cent.

Axis Bank provides a suite of corporate and retail banking products. The bank operates through four segments viz. treasury, retail banking, corporate/wholesale banking and other banking business.