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<ul><li>Albeit briefly, the bank became the second PSB to clock in ₹1 lakh crore in market value.</li><li>India’s largest bank, SBI, has a market cap of over ₹5 lakh crore. </li><li>As of Monday’s valuation, the <keyword id="92547" type="General" weightage="80" keywordseo="bob" source="Orion">BoB</keyword> stock has more than doubled in the past year.</li></ul><keyword id="6358007" type="General" weightage="20" keywordseo="bank-of-baroda" source="Orion">Bank of Baroda</keyword> became the second Indian bank public sector bank or PSB to hit a market cap of over ₹1 lakh crore in trade on Monday. As it gained over 2% in the morning session, its market cap breached the mark and fell back to ₹99,419 crore by 1:30 pm. Albeit briefly, the bank became the only PSU bank to clock in that market value, after India’s largest bank, SBI which has a market cap of over ₹5 lakh crore. The bank has has no looking back in size ever since state-owned <keyword id="6359442" type="General" weightage="50" keywordseo="dena-bank" source="Orion">Dena Bank</keyword> and <keyword id="273130" type="General" weightage="50" keywordseo="vijay-bank" source="Orion">Vijay Bank</keyword> merged into it in 2019. Beyond that, its stock has been on an uptrend, like in the case of most bank and financial sector stocks. In the last one year, the stock can be considered a multibagger as it has gone up from ₹96 apiece to ₹183 on Monday. On a growth path, say analysts The stock has been gaining on the back of strong earnings growth that has been delivering for the last three quarters. A recent report by Kotak Institutional Equities says that levers are in place for its ability to hold up profitability going forward. “While we are currently in a period of subnormal credit cost and supernormal net interest margin (NIM) for most banks, BoB seems to have adequate levers in place to ensure that return ratios sustain for some more time,” said the Kotak Institutional Equities report. The company management is confident about growing at a faster pace than the industry, led by retail, including unsecured loans, where it sees strong potential for further mining the existing customer base. A report by ICICI Direct says it expects credit growth to be in the range of 12-14% YoY for FY24. It says that repricing of liabilities at a faster rate is expected to put pressure on margins, and also expects operating expenditure to remain elevated. “Overall, we expect earnings to improve in FY24, albeit at a slower pace as compared to FY23. Thus, sustainable credit growth coupled with healthy return ratios is expected to drive valuation, though we remain selective on stock,” ICICI Direct said. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div>

Bank of Baroda becomes second public sector lender to hit ₹1 lakh crore market cap

As the Indian stocks markets reels under the <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword> crisis, a report by <keyword id="46252" type="PERSON" weightage="20" keywordseo="Motilal-Oswal">Motilal Oswal</keyword> says that Indiaa¿s share in the global market capitalization is below the historic average. Currently, it is at 2.2 per cent below its historic average of 2.5 per cent. The 'Bull &amp; Bears' report also noted that India's market cap has declined more, compared to the fall in the world market cap in the past 12 months. "Over the last 12 months, the world's market cap has decreased 12.3 per cent ($9.6 trillion), while India's market cap is down 31 per cent," it said. The report also noted that the market cap-to-GDP ratio of India has declined swiftly from 79 per cent as on FY19 to 54 per cent (FY20EGDP), much below its long-term average of 75 per cent and closer to the levels last seen during FY05 and FY09. On the market performance in the FY 2019-20, it said: "The <keyword id="6354813" type="UNKNOWN" weightage="20" keywordseo="Nifty">Nifty</keyword> could not have had a worse finish to FY20. As the coronavirus (COVID-19) pandemic spread across the world, the Nifty nosedived 23 per cent in Mar 20 to close at 8,598 (-26 per cent YoY), the worst since Oct'08." While funds from domestic institutional investors (DII) at $17.9 billion, against $10.3 billion in FY19 were robust in FY20, inflows from foreign institutional investors (FII) were weak at $1 billion. It noted that the Nifty is trading at a 12-month forward return on equity (RoE) of 15 per cent, above its long-term average of 14.5 per cent. It also said that 80 per cent of the Nifty companies are trading at discount to their historical averages On the private banking sector, the report said that business environment remains under challenging due to the coronavirus pandemic. "Over the past few years, corporate lending was muted resulting in systemic loan growth being largely driven by the retail segment. However, the outbreak of COVID-19 has led to weakening of credit demand in consumer retail, MFI and SME/business banking segments," it said. Loan growth of private banks is likely to moderate to 14 per cent, in FY21 against the previous projection of 18 per cent. Moderation in business growth and the recent reduction of 75 basis points in the repo rate will have a bearing on margins as floating retail and SME loans linked to the external benchmark get re-pricedimmediately while deposits re-price with a lag effect. Among the private banks, the Motilal Oswal report said that <keyword id="46717" type="COMPANY" weightage="20" keywordseo="IndusInd-Bank">IndusInd Bank</keyword> and <keyword id="2179992" type="COMPANY" weightage="20" keywordseo="RBL-Bank">RBL Bank</keyword> will be the most vulnerable to asset quality challenges, and thus, credit cost should rise significantly. On the public sector banks (PSB), it said that the consolidation of PSBs is a positive move from a long-term perspective, whichwill improve their competitiveness. "However, this will come with its own set of challenges in the near term related to credit growth, higher credit cost, integration issues, etc. The outbreak of COVID-19 has further weakened credit growth of PSBs." State Bank of India's (SBI) loan growth is likely to moderate to 8 per cent while for Bank of Baroda, it is likely to moderate to 7 per cent over FY21. PSBs have relatively higher share of exposure in the SME segment, and thus, asset quality should remain under pressure in the near term. SEE ALSO:<a href="https://www.businessinsider.in/topic/coronavirus">Coronavirus News and Updates</a> <a href="https://www.businessinsider.in/india/news/world-bank-approves-1-billion-funding-for-india-200-million-for-pakistan-to-fight-coronavirus/articleshow/74957213.cms">World Bank approves $1 billion funding for India, $200 million for Pakistan to fight coronavirus</a> <a href="https://www.businessinsider.in/india/news/how-to-check-coronavirus-symptoms-at-home/articleshow/74960334.cms">What are the Coronavirus symptoms and how to check for them at home</a>

India's contribution to world's marketcap is at historic low, says Motilal Oswal

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Bank of Baroda becomes second public sector lender to hit ₹1 lakh crore market cap

Katya Naidu

India's contribution to world's marketcap is at historic low, says Motilal Oswal

IANS

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