Market Movers: Dalal Street is picking sides among private banks

MUMBAI: It is not often that Dalal Street is so categorical in stating where its loyalties lie. The last time the market was so unanimous in its vote was when it had to choose between Reliance Industries and Bharti Airtel some five years ago.

Today investors made it clear that within the banking space their money is on ICICI Bank, instead of market darlings HDFC Bank and Kotak Mahindra Bank. When bank stocks were being battered from the first minute, ICICI Bank’s stock stood tall. We are used to Kotak Bank achieving similar feats in the past.

Shares of ICICI Bank ended 1.3 per cent higher even as the Nifty Bank slumped 0.8 per cent. A cautious approach and the deterioration in asset quality in the June quarter for HDFC Bank and Kotak Bank have made investors skeptical over their growth prospects.

ICICI Bank is typifying the mix of quality and growth that was once synonymous with both HDFC Bank and Kotak Bank. ICICI Bank’s rising heft is reflected in the fact that its weight in Nifty50 has gone up to 7 per cent from 4.8 per cent a year ago. In the meantime, Kotak Bank's weightage has fallen by 71 basis points and HDFC Bank by 48 bps.

Bharti Airtel does it again
Investors of Bharti Airtel can finally breathe a sigh of relief. Their bet on the company a year ago was founded on the assumption that tariffs in the telecom sector will rise once the consolidation ends. They have had to wait almost a year as the company moves to disband the Rs 49 entry-level recharge plan and replace it with Rs 79 plan for prepaid customers, signaling that it will raise tariffs even more going ahead.

A move is likely to boost Airtel’s Indian EBITDA by as much as Rs 1,000 crore and its ARPUs by 2-3 per cent.