Axis Bank in the limelight

There is a lot of activity in Axis Bank, with volumes on the counter rising over 20 times!  The stock which closed yesterday at Rs.1356.85, opened today at Rs.1335 and went on to hit an intra day low at Rs.1313.25. it has recouped very well from this low and is currently at 1357 levels.

The stock is volatile today after the Economic Affairs Secretary stated that the Govt had finalized plans to sell stake in Axis via block trades on exchanges. This stake sale is through SUUTI, which holds 20.72% stake and it will now sell 4.22 crore shares or 9% stake today and raise about Rs.5500 crore. Thus the price range for this deal stands at Rs.1290 to Rs.1375/share. But the stock may not exactly slump down into the dungeons as LIC is expected to step in and buy SUUTI’s stake. It might not be the entire 9% stake but will buy to the tune of around Rs.3000 crore, which would be 5% stake.  The news on the Street is that LIC will bid for this stake at a price of Rs.1280 to Rs.1300/share, which is much below its current market price.