Axis Bank Seek to Sell Majority Stake in NBFC Arm Axis Finance

As per news reports, Axis Bank is considering selling a majority stake in its NBFC unit, Axis Finance Ltd. The bank is working with an adviser to review its options and may seek a valuation between $900 million and $1 billion. However, discussions are still ongoing and no final decision has been made.  

Reason for the Sale

Axis Bank is making this move to follow the Reserve Bank of India’s (RBI) rules on how banks should manage their subsidiaries. Earlier, the bank planned to list Axis Finance publicly, but now it is considering a private sale as it may get a better price. Investment bank Morgan Stanley has been hired to find a buyer.  

Axis Bank’s Support to Axis Finance

Axis Finance has grown with the help of funds from Axis Bank. The most recent funding was ₹300 crore in the 2024 financial year. Axis Bank also provides ₹2,050 crore in financial support and manages its operations. Axis Finance offers loans for businesses, properties and other collateral-based loans.  

Impact on the NBFC Sector

Shadow banks like Axis Finance provide loans to people who may not qualify for regular bank loans due to low income or lack of credit history. These loans often have higher interest rates which can increase the risk of defaults. The outcome of this sale could affect investor confidence and impact the NBFC sector.

Share Price Performance 

As of February 27, 2025, at 9:45 AM, the shares of Axis Bank Ltd were trading at ₹1,017.15 per share, reflecting a surge of 0.80% from the previous day’s closing price. Over the past month, the stock has registered a profit of 7.28%. The stock’s 52-week high stands at ₹1,339.65 per share, while its low is ₹933.50 per share.

Conclusion

Axis Bank’s potential stake sale in Axis Finance could reshape its business strategy while aligning with RBI norms. The decision may impact investors and the NBFC sector, but no final decision has been made yet.

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