Client and value-wise, Citi deal a good fit for Axis Bank: Sandip Sabharwal

“The sentiments will be positive given the value of the deals and it should be taken positively because if the cash outgo was greater, then it could have been taken negatively,” says asksandipsabharwal.com

The value of the Axis-Citi deal is towards the lower end of the band that most people were looking at. What does this mean for Axis Bank?
I think it is a work fit for Axis Bank because like you said the acquisition value is at the lower end. Earlier, there was speculation around Rs 20,000 crore of value for the deal. The $1.6 billion is at the lower end of that.

Secondly Citibank has a more affluent client base and that makes a good fit for Axis Bank which is also trying to do well on the retail side and grow their business in the more lucrative pocket. Overall, prima facie, it looks to be a good deal for Axis.

Given the fact that this strong CASA franchise is also getting added to Axis, do you see some sort of rerating happening for the counter?
The sentiments will be positive given the value of the deals and it should be taken positively because if the cash outgo was greater, then it could have been taken negatively. So, to that extent, it is positive.

The stock has been reacting positively over the last few days and may be in anticipation of what was going to come. So near term performance after the initial popup would depend obviously on how the overall market plays out. So I would say there is a possibility of an initial pop up, but after that it will be more market dependent.