Axis Bank’s deal with Citigroup will add 26 lakh credit cards to the bank business. The company’s market share in the credit card business will increase from 3.6 per cent to 15.6 per cent.
Axis Bank Stock Price: Private sector Axis Bank shares are seeing a rise today. The stock gained about 2 percent to reach a price of Rs 763, which closed at Rs 750 on Wednesday. In fact, Axis Bank will acquire Citigroup’s India retail banking business for $1.6 billion. Citigroup has given this information on 30 March. Since this news, the sentiments regarding the stock have improved. At the same time, the brokerage house has also liked this deal. In the stock, many brokerage houses have increased the target price giving a buying opinion. According to the report of the brokerage house, 44 percent upside can be seen in the stock in the coming days.
Will help in increasing market share
Brokerage house Motilal Oswal has given a buy opinion in the stock and has kept the target of Rs 930. In terms of current price of Rs 750, it can give 24 percent return. The brokerage house says that this deal will add 26 lakh credit cards to the business of Axis Bank. This will increase the company’s market share in the credit card business from 3.6 per cent to 15.6 per cent. The company’s earnings will also be normal from this deal. Profitability will also increase. The brokerage says that how Axis Bank will use Citibank’s banking products in the coming days, it will be a matter to be seen. On this only the real success of this deal will rest. If the bank uses it properly, then it will be successful in increasing its market share.
deal will benefit
Brokerage house CLSA has also set a target of Rs 1080 while giving buy rating in the shares of Axis Bank. This is 44 per cent more than the current price of Rs 750. The brokerage house says that this deal is going to be done at fair value, which will not put too much pressure on Axis Bank and will not have much impact on earnings. At the same time, after the deal, its gap with big private banks will also be reduced. City’s retail business is good, which will benefit Axis Bank. Brokerage house Morgan Stanley has set a target of Rs 910 with an overweight rating. Whereas Jefferies has given a target of Rs 1040 with Buy rating.
what is the matter
Axis Bank will further buy Citigroup’s Indian retail banking business. The deal could be worth $1.6 billion. However, it will also require the approval of the regulators. With the completion of the deal, the size of the balance sheet of Axis Bank will increase and there may be a boom in the retail segment. Last year, Citigroup had decided to close the Indian business. In April 2021, the group announced plans to exit the consumer banking business as part of its glpable strategy. This business includes Credit Cards, Retail Banking, Home Loans and Wealth Management. Citigroup has 35 branches across the country and around 4,000 employees for its consumer banking business.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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