Extending the gains into the fourth consecutive session, shares of IndusInd Bank ended 7.93 percent up at an almost three-month high of Rs 500.70 on BSE on June 10.
In the last four trading sessions, the stock has risen 21 percent. Experts attributed the rise to bottom-fishing along with technical factors.
"There is a technical trigger behind the rise in IndusInd shares. If we look at the monthly chart of the bank, we see it has given a narrow-range breakout because in the last two months it has not been able to surpass Rs 490-480 zone convincingly. The counter was beaten down too," said Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal Financial Services.
"A further 10-15 percent cannot be ruled out on the higher side, which can take it to Rs 530-540 kind of levels. There should be a stop loss of Rs 475 for the next one or two weeks," Taparia said.
Rajesh Agarwal of AUM Capital said stocks like IndusInd, Bandhan Bank and RBL were beaten down in the last few months over asset-quality concerns. Now they were witnessing bottom-fishing.
In a regulatory filing on June 7, IndusInd Bank said its promoters wanted to buy more stake in the company.
"IndusInd International Holdings and IndusInd Ltd, promoters of IndusInd Bank, currently hold 14.68 percent of the paid-up share capital of the bank. We shall now purchase additional shares from the open market in India," the filing said.
Promoters Hinduja Group has applied to the regulator (RBI) to raise their stake in the bank to 26 percent from 14.68 percent.
According to RBI norms, a bank needs to bring down its promoter shareholding to 40 percent in the first three years of operations. Thereafter, the promoter shareholding has to be reduced to 20 percent in 10 years and 15 percent in 15 years.
For IndusInd Bank, the promoter equity holding in the bank, as per the RBI norms, is capped at 15 percent.
While the rules say promoters can have only a 15 percent stake in the bank, IndusInd Bank may feel optimistic about a positive response from the regulator as in the past, the RBI allowed Uday Kotak to hold a 26 percent stake (with capped voting rights) in Kotak Mahindra Bank.
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