Federal Bank Hits Record After RBI Approves Appointing KVS Manian As CEO
NDTV Profit had first reported in February that Manian was being tapped as a successor to Srinivasan. Manian was joint MD at Kotak Mahindra Bank until his sudden resignation in April.
Shares of Federal Bank Ltd. hit record highs on Tuesday after the Reserve Bank of India approved the appointment of Krishna Venkat Subramanian as managing director and chief executive officer of the bank.
The private lender said that the appointment will come into effect from Sept. 23 and will be for a period of three years. Manian will succeed Shyam Srinivasan, who is set to retire in September, according to an exchange filing on Monday.
NDTV Profit had first reported in February that Manian was being tapped as a successor to Srinivasan. Manian was joint managing director at Kotak Mahindra Bank Ltd. until his sudden resignation in April.
Nomura Research viewed this development as positive, and the new CEO appointment to drive continued rerating. "This can potentially aid the Federal Bank's growth and profitability outlook over the medium term."
The appointment brings an end to the uncertainty around management succession, according to Nomura. The lender continues to be the brokerage's top mid-cap banking idea.
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Shares of Federal Bank rose as much as 5.45% to hit record high of Rs 203.4 apiece on the NSE. It was trading 2.66% higher at Rs 198.06 apiece, compared to a 0.04% advance in the benchmark Nifty 50 as of 09:35 a.m.
The stock has risen 47% in the last 12 months and 27% on a year-to-date basis. The total traded volume so far in the day stood at 11 times its 30-day average. The relative strength index was at 72.
Thirty-two out of the 41 analysts tracking the company have a 'buy' rating on the stock, six recommend a 'hold' and three suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 1.5%.
