Axis Bank stock gains as stake sale attracts strong demand

Axis Bank stock gains as stake sale attracts strong demandAxis Bank stock gained nearly 3.7 per cent at 0354 GMT to around Rs 1,465.35 a share, its highest level since November 18, 2010, as the bank's stake sale attracted strong demand.

Axis Bank, India's third-largest private sector lender by market value, on Monday started a share sale to raise as much as Rs 55.5 billion (US$1 billion).

Sources said that the Mumbai-based lender aimed at collecting nearly $877 million by selling 34 million shares, at a price of Rs 1,390 apiece, to institutional investors; and another $152 million by selling shares on a preferential basis at the same price to some existing shareholders.

The sale is reportedly India's biggest this year. It comes after the company raised Rs 573 billion by selling equity in 2012.

Two people with direct knowledge of the matter said that Axis Capital, Citigroup Inc. and JPMorgan Chase & Co. were managing the transaction, and that the equity sale had received more than enough demand.

Axis Bank emerged as the third-best performer in the fourteen-stock Bankex index in the past six months. Strong foreign demand for Indian stocks helped the benchmark BSE India Sensitive Index (SENSEX) jump this month to its highest point in more than two years.