Axis Bank Invests Rs 1,500 Crore in Consumer Lending Arm

Key Highlights

• Axis Bank shares rose nearly 2% on March 18 after the bank announced a Rs 1,500 crore investment in its consumer lending arm, Axis Finance.
• The investment is part of the bank's strategy to capitalize on the relaxation of rules on overlapping activities between banks and their subsidiaries by the Reserve Bank of India (RBI).

Recent Developments

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In January, Axis Bank reevaluated its plans to sell a stake in Axis Finance after the RBI eased its rules on overlapping activities. The original rules would have likely forced large banks, including HDFC Bank and ICICI Bank, to either merge or divest non-bank lending businesses held as subsidiaries.

Investment Details

• Axis Bank plans to complete the Rs 1,500 crore investment in Axis Finance by March 2027 through a cash consideration in one or more tranches.
• The bank has already invested Rs 2,375 crore in Axis Finance over the past decade.
• Axis Finance, registered as a non-bank finance company, will submit a revised growth plan to the bank's board in April and reevaluate its capital-raising needs thereafter.

Financial Performance

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• As of March 31, 2025, Axis Finance had assets under management of Rs 41,583 crore.
• At 12:30 pm on March 18, Axis Bank was trading 1.7% higher at Rs 1,249.4 apiece. Bank Nifty was trading 0.5% higher at 55,167.05.