The shares of one of India's leading private sector banks saw a significant decline yesterday, falling to their lowest price in over a year. Kotak Mahindra Bank witnessed its stock value decrease over 4% on the BSE and NSE exchanges after a key leadership announcement.
The bank stated that KVS Manian, who had been with the institution for nearly three decades serving in various critical roles, had stepped down from his position as Joint Managing Director with immediate effect. Manian was recently elevated to the role and had decades of experience guiding different business verticals within the bank including commercial, wholesale, private and consumer banking operations.
Investors reacted negatively to the news of Manian's departure, with the stock prices seeing substantial losses. On the BSE, shares dipped 4.38% falling to Rs. 1,552.55, marking a 52-week low. Similarly on the NSE, values closed 4.40% lower at Rs. 1,552.40.
This leadership change came within days of restrictions imposed by the Reserve Bank of India on the lender regarding new online customer onboards and credit card issuances. The central bank had reported ongoing technology infrastructure weaknesses and risks not being properly mitigated. With nearly 60 lakh cards issued, further growth in this segment will be limited until upgrades are made.
While losses were steeper initially, the scrip recovered some ground later in the day but still ended the session with significant declines from the prior close. Analysts will be watching upcoming quarterly results for further impacts of these leadership and regulatory issues. Overall investor confidence in the bank appears to have taken a hit with this news.
