SMBC has received approvals to acquire nearly 25% of Yes Bank. The analyst highlights bearish signals if key support levels fail to hold.
Sumitomo Mitsui Banking Corporation (SMBC) is reportedly looking to offload its entire 1.65% stake in Kotak Mahindra Bank through block deals.
The sale, amounting to 3.28 crore shares worth around ₹6,000 crore, has drawn interest from FIIs and mutual funds. Proceeds from the sale are expected to be redirected toward SMBC’s planned investment in Yes Bank.
Last month, the Reserve Bank of India cleared the Japanese lender to acquire up to 24.99% in Yes Bank, while the Competition Commission of India also approved the deal. In May, SMBC had announced a ₹14,000 crore agreement to acquire a 20% stake.
Kotak Mahindra Bank shares fell as much as 0.5% on Tuesday, before reversing the losses to end 0.5% higher at ₹1,960.4. Year-to-date, the stock has gained over 10%.
Analyst Take
Kotak Mahindra Bank finds itself at a critical juncture as SMBC prepares to exit its 1.65% stake, with reports suggesting the Japanese lender may reallocate capital toward Yes Bank. The development comes at a technically sensitive point for Kotak’s stock, amplifying market volatility, said SEBI-registered analyst Rajneesh Sharma.
SMBC’s potential stake sale has added an overhang, as the block deal could trigger near-term supply pressure. Kotak’s fundamentals remain sound, with its gross non-performing assets (NPA) at 1.48% and net NPA at 0.45%, continuing to reflect strong asset quality.
Technical View
On the charts, Kotak Bank has been consolidating within a broad four-year range of ₹1,800 – ₹2,237. After being rejected at the upper end of this band, the stock recently slipped below its rising channel, signaling a loss of bullish momentum, Sharma noted.
The relative strength index (RSI) remains under 50, pointing to sustained weakness. If the crucial ₹1,883 level fails to hold, downside pressure could intensify, leading to a drop toward ₹1,800 or even ₹1,650. Conversely, holding the support could lead to a rebound toward ₹2,029 and possibly ₹2,237, but the bias currently leans bearish, Sharma said.
What Is The Retail Mood?
Data on Stocktwits shows that retail sentiment has remained ‘neutral’ on this counter for a week now.
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