New Delhi: The IndusInd Bank has lost an over Rs 9,000 crore market capitalisation (market-cap) in the past two trading days after foreign brokerage UBS downgraded the stock to ‘sell’ from ‘neutral’ on expectations of higher credit costs. Shares of the private sector lender were down 5 percent at Rs 1,412 on Friday, falling 10 percent in two days.
At 01:45 pm, the IndusInd Bank market cap stood at Rs 85,461 crore. It has lost Rs 9,094 crore since Wednesday (June 12) when its market cap was Rs 94,555 crore, the BSE data shows.
The brokerage firm lowered its price target to Rs 1,400, drawing inference from the lending cost of the bank, which it believes, could rise to 150 basis points (bps) as against the lender’s guidance of 65 bps in FY20.
The bank’s management indicated that the exposure of 1.9 percent to stressed groups is expected to come down in the coming quarters. They also indicated that exposure to stressed housing finance companies (HFCs) included in the above limit is not material.
The management is of the opinion that the current stress in the non-banking financial space, especially HFCs is more of a ‘liquidity’ issue than a ‘solvency’ issue.
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