Axis Bank OFS Review

Axis Bank OFS

Axis Bank OFS comprises sale by The Specified Undertaking of Unit Trust of India (SUUTI)  for 50,759,949(1 .98°/o) equity shares of face value of Rs. 2 each of the Company (“Base Offer Size”), with an option to additionally sell 26337,187(1.02%) equity shares of the Company (the “Oversubscription Option” and in event the Oversubscription Option is exercised) thus collectively representing 3% of the total paid up equity share capital.

About Axis Bank OFS

Issue Period12 Feb 2019 to 13 Feb 2019
Face Value2
Floor Price689.52
Base Offer5,07,59,949
Total with GreenShoe7,70,97,136
Base offer Retail50,75,995
Base offer Reial- Rs. Cr350
Aggregate offer Retail7709714
Aggregate offer Retail Rs. Cr532
Lot Size1
Tick Price0.01
ISIN NoINE238A01034
Minimum Bid Quantity1
Maximum Bid Quantity5,07,59,949
Allocation MethodologyPrice Priority

Axis Bank OFS : Update Day 1:

  • Axis OFS : Allotment above Rs. 695 likely in Day 1 Bidding
  • Axis OFS : Base Issue 2.56x, Aggregate Issue 1.69x in Day1 Bidding
  • Axix Bank Share close at Rs. 703.5 after Day 1

OFS Allocation Methodology

Retail investor shall mean an individual investor who places bids for Offer Shares of total value of not more than Rs. 2,00,000/- (Rupees Two Lakhs) aggregated across Stock Exchanges.

A Retail Investor may bid at any price above the Floor Price and/or bid at “Cut-Off Price”. “Cut-Off Price” means the lowest price, as shall be determined, at which the Offer Shares are sold in the Non-Retail Category, based on all valid bids received on T Day.

Allocation to retail Investors shall be made based on the Cut-Off Price. Upon determining Cut-Off Price for the Retail Investors, the Other Shares reserved for such category shall be allocated to eligible bids of Retail Investors on price priority method at multiple clearing prices / Cut-Off’ price in accordance with SEBI OFS Circulars. In the case of retail potion being oversubscribed, the aggregate number of Offer Shares bid for at a particular clearing price / Cut-Off Price, as the case may be, is more than available quantity then the allocation for such bids will be done on a proportionate basis at such clearing price (at or above the Cut-Offer Price) / the Cut-Off Price, as the case may be.

Individual investors shall have the option to bid in the Retail Category and the Non-Retail Category. However, if the cumulative bid value by such an individual investor across both categories exceeds Rs. 2,00,000/- (Rupees Two Lakhs), the bids in the Retail Category will become ineligible. Further, if the cumulative bid value by an individual investor in the Retail Category across the Stock Exchanges exceeds Rs. 2,00,000/- (Rupees Two Lakh only), such bids shall be rejected.

Settlement shall take place on a trade for trade basis. For bids received from Non-Retail Category on T Day, non-institutional investors and institutional investors who place orders with 100% of the order value deposited upfront, settlement shall take place on a T+I Day, in with the SEBI OFS Circulars. In the case of institutional investors who place bids without depositing 100% of the order value upfront, settlement shall be as per the existing rules for secondary market transactions (i.e., on T+2 Day). For the bids received on T+l Day, from the Retail Category and from the un-allotted non-Retail Investors who choose to carry forward their bid to T+l Day, the settlement shall take place on T+3 Day. In case of non-institutional investors and institutional investors bidding with 100% margin upfront who chose to carry forward their un-allotted bids to T+1 Day, the settlement shall take place<on_T+2_Day.

The allocation to the non-Retail Investors shall be at price equal to the Cut-off Price or higher as per the bids.

About Axis Bank

  • Axis Bank is the 3rd largest private bank in terms of loans as well as profitability.
  • The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.
  • Axis Bank has 3,882 domestic branches (including extension counters) and 12,660 ATMs across the country as on 30th September 2018, the network of Axis Bank spreads across 2,211 cities and towns,
  • Axis loan book as on Q3FY19 stood at 475105 crore.
  • CASA deposits at Rs. 235552 crore, account for ~46% of deposits.

Axis Bank: Quarterly Results (figs in Rs. Crore)

Rs. In Cr
Net Sales14129.7313280.9912777.0211771.19
Other Income4000.692678.382924.992788.66
Total Income18130.4215959.3715702.0114559.85
Total Expenditure7134.226743.877057.4511026.44
Profit After Tax1680.85789.61701.09-2188.74
EPS 6.543.072.73-8.53
EPS (Ann.)26.1612.2910.92-34.11
Book Value 0253250247
Face Value2222

Axis Bank  Share Price Chart

Stock Share Price axis bank

Axis bank OFS: Salient points and Assessment

  • Axis Bank loan book grew at 30% CAGR which is higher than 19% CAGR of the industry.
  • Axis Bank Ltd.’s quarterly net profit in Q3Fy19 surpassed estimates of analysts.
  • Retail Investors can bid in “RI” and “RIC” Category upto (i.e. less or equal to) Rs 2 lacs
  • To place Retail Investor bids at Cut Off Price, Users are required to select RIC category
  • Cut-off price will be determined based on the bids received on T Day
  • Bidding in OFS opportunities like Axis Bank OFS is challenging for retail investors because of the need to may money upfront and change in bid price by large investors at the last moment. Hence chances of allotment many times is difficult.
  • The government holds 9.56 percent stake in Axis Bank through SUUTI as on Dec. 31, 2018.
  • Axis Bank OFS floor price at Rs 689.52/share is at discount of 3% to closing price of Rs 711 on the NSE.
  • Bharat 22 ETF (Tranche 3) is likely to open on 14-02-19. Its basket of shares also contains Axis Bank. It offers a lucrative 5% discount to retail.
  • Axis Bank OFS may be a reasonable opportunity as Axis Bank price has been steadily moving up and the bank is expected to do well after a change of guard with a new CEO at its helm.
  • Standard disclaimer:  I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.

Leave a Reply