Succession overhang on Kotak Bank stock may continue for now

The bank’s stock performance has been the second-worst among 15 private bank scrips over the past one year through 1 September 2023, with a 6.9% negative return compared to that of ICICI Bank (10.8%), HDFC Bank (7%) and Axis Bank (33.19%), Capitaline Databases shows.

- Ram Sahgal

The three-year share perf-ormance similarly has also been relatively poor,with the bank being ranked 13th by returns among its 15 peers . It generated a 23.8% return against ICICI Bank stock’s 148% return, Axis Bank’s (104%) and HDFC Bank (40%).

“Since 2020, there has been an overhang (on the stock) of a court row with RBI over reduction of promoter stake to below 20% and the succession issue, with the central bank fixing the promoter-led MD & CEO’s tenure at 12-15 years," said Ambareesh Baliga, market analyst.