In an exchange filing, Axis Bank said the investment will be made in cash in one or more tranches before March 31, 2027, by subscribing to Axis Finance’s rights issue. This comes amid a broader strategic rethink after India’s third-largest lender paused plans to sell a stake in the non-bank finance company (NBFC).
Axis Bank had initiated the stake sale process last year and appointed merchant bankers, including Morgan Stanley, after the Reserve Bank of India (RBI) proposed draft rules in 2024 restricting overlapping business activities between banks and their subsidiaries. However, the RBI diluted the proposal in December last year following industry pushback, leading Axis Bank to pause the stake sale plans, according to a report in January.
Also Read | Planning your MF investment for FY27? Experts advice flexicap, multi-cap with gold & silver ETF exposure
Axis Finance, incorporated in April 1995 and registered as an NBFC, has seen steady growth in recent years, with turnover rising to Rs 4,296 crore in FY25 from Rs 3,321 crore in FY24 and Rs 2,297 crore in FY23. The company’s turnover for the half year ended FY26 stood at Rs 2,504 crore.
Axis Bank, which has invested Rs 2,375 crore in Axis Finance over the past decade, will review the NBFC’s growth roadmap next month. The subsidiary is set to present a revised plan to the bank’s board in April, after which Axis Finance will reassess its capital-raising needs.Axis Bank share price rose more than 2.5% to Rs 1,259.30 apiece on Wednesday, extending gains for the third consecutive session. It is currently among the top gainers on benchmark indices Sensex and Nifty, as well as the Nifty Bank index. (With inputs from Reuters)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
