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Arvind Sanger’s view on Kotak Mahindra Bank after RBI action
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The Managing Partner at Geosphere Capital Management, prefers high-quality private banks, viewing them as key drivers of a sustained economic cycle.
Arvind Sanger, Managing Partner of Geosphere Capital Management believes that a meaningful pullback in the Kotak Mahindra Bank stock would be a buying opportunity, although it might face challenges for some time.
“It (Kotak) is not a stock that we are currently involved in, but if the stock gets punished too much, we would be interested because this is a high-quality franchise, this will be a bit of an impediment in terms of short-term growth. So short-term growth may suffer, but any meaningful pullback for a high-quality bank like this would at some point be a buying opportunity,” Sanger told CNBC-TV18.
On Wednesday, April 24, the Reserve Bank of India (RBI) ordered the private lender to halt new customer acquisitions through online and mobile banking channels and stop issuing new credit cards, citing concerns over compliance and risk management.
The Kotak Mahindra Bank stock crashed 10% today (April 26), its biggest single-day drop since March 23, 2020, hitting a 52-week low. It shed nearly ₹30,000 crore in market capitalisation.
Also Read | RBI bars Kotak Bank from onboarding new online customers, issuing new credit cards
Sanger prefers high-quality private banks as he believes that for a sustained economic cycle, private sector banks in the country will have to be at the forefront in terms of driving the financing needed for the growth.
However, he also advises being careful and flexible when investing, especially with the changes brought by artificial intelligence (AI).
Also Read | Kotak Mahindra Bank to see de-rating post RBI action? Here’s what analysts said
In the tech space, Sanger finds it difficult to figure out which companies will succeed.
He believes that many IT companies catering to the general public will struggle due to AI advancements in the next couple of years.
For the entire interview, watch the accompanying video
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