KRChoksey maintains the hold rating of Axis Bank at 
1738
Bangalore:KRChoksey has maintained the hold rating of Axis Bank at 
1738, in the market, which was shown in the November 8th report. It has also been reported that Axis Bank has officially acquired ENAM's securities' prominent businesses, which include, investment, banking and institutional broking (IB), retail broking and distribution of financial products.
"Axis Bank has acquired ENAM Securities' key businesses such as investment banking, institutional broking (IB), retail broking and distribution of financial products at Rs 2067 crores in all stcok swap deal. Axis Bank will issue 5.7 shares for every one share held by ENAM's shareholder.ENAM's top management has signed 5 years non-competitive agreement for investment banking, equity broking & financial distribution business."
"Equity dilation will be 3.3 percent of post merger equity capital. FY11 earnings will be diluted by 3.4 percent. However we believe this acquisition will turn into earning accretive in 15-18 months as merger synergies will be realized in medium to long term. NAM securities has been acquired at 19.6x FY11 annualized earnings, premium to listed brokerage like edelweiss and India Infoline which are trading at 17.1x of FY11 annualized and 17x FY11 annualized earnings respectively."
"At Rs 1469, the stock is trading at 15.6x FY12 earnings and 2.8x FY12 adjusted book. We believe this acquisition will provide strong platform to Axis Bank to sell equity product to their corporate and retail clients, resulting into higher fee income going forward. Moreover, Axis has built strong corporate relationships in debt syndication and corporate finance over the years, but it was lacking product offerings on equity side to clients. So,this deal will be a wining proposition for both Axis and ENAM in long term. We continue to maintain our HOLD rating on the stock with a target price
of Rs 1738 based on our residual income model," says KRChoksey research report.
1738, in the market, which was shown in the November 8th report. It has also been reported that Axis Bank has officially acquired ENAM's securities' prominent businesses, which include, investment, banking and institutional broking (IB), retail broking and distribution of financial products.
"Axis Bank has acquired ENAM Securities' key businesses such as investment banking, institutional broking (IB), retail broking and distribution of financial products at Rs 2067 crores in all stcok swap deal. Axis Bank will issue 5.7 shares for every one share held by ENAM's shareholder.ENAM's top management has signed 5 years non-competitive agreement for investment banking, equity broking & financial distribution business."
"Equity dilation will be 3.3 percent of post merger equity capital. FY11 earnings will be diluted by 3.4 percent. However we believe this acquisition will turn into earning accretive in 15-18 months as merger synergies will be realized in medium to long term. NAM securities has been acquired at 19.6x FY11 annualized earnings, premium to listed brokerage like edelweiss and India Infoline which are trading at 17.1x of FY11 annualized and 17x FY11 annualized earnings respectively."
"At Rs 1469, the stock is trading at 15.6x FY12 earnings and 2.8x FY12 adjusted book. We believe this acquisition will provide strong platform to Axis Bank to sell equity product to their corporate and retail clients, resulting into higher fee income going forward. Moreover, Axis has built strong corporate relationships in debt syndication and corporate finance over the years, but it was lacking product offerings on equity side to clients. So,this deal will be a wining proposition for both Axis and ENAM in long term. We continue to maintain our HOLD rating on the stock with a target price
of Rs 1738 based on our residual income model," says KRChoksey research report.