Take-off time at Axis Bank

IN LATE APRIL last year, Axis Bank became India's third-most-valued private sector lender.

- SACHIN KUMAR

Overtaking the market capitalization of Kotak Mahindra Bank was an achievement, which the street acknowledged had been unthinkable a few years before.

"Three years ago would someone have thought that Axis will get a market cap higher than Kotak? The best part about Axis Bank is that they reported the gold standard of 2% ROA—something that we never thought they would..." Suresh Ganapathy of Macquarie wrote, going on to say, "all in all things look to be fine for Axis Bank."

The only "overhang," as Ganapathy called it, was the CEO's tenure that was coming up for renewal. With the regulator approving a three-year stint for MD & CEO Amitabh Chaudhry, that's no longer a concern.

Indeed, it's a ringing endorsement of Chaudhry's performance. With a capital adequacy of 17% and excellent asset quality, Axis Bank is today on solid ground. It wasn't always like this. In January 2019, when Chaudhry took over, the lender's asset quality was worrying. The bank had ended 2017-18 with gross non-performing assets (NPAs) of 6.7% and a slightly lower 5.3% in 2018-19. The return on assets in 2018-19 was a poor 0.63%.