Overnight, Kotak Mahindra Bank’s stock plunges 11%, shattering Uday Kotak’s empire! Discover What Took Place!

Kotak Mahindra Bank suffered a major blow in today’s stock market update when its share price crashed by 10.85% to settle at ₹1,643 on the BSE. The Reserve Bank of India (RBI) decided to prohibit the bank from onboarding new customers through online and mobile banking channels because of worries about its technology systems, which led to this sharp fall.

Shareholders of Kotak Mahindra Bank suffered a loss of ₹39,768.36 crore as a result of the bank’s market value significantly declining due to the steep decline in share price. By the close of Thursday’s trading session, the bank’s market capitalization, which was ₹3,66,383.76 crore on Wednesday, had dropped to ₹3,26,615.40 crore.

Notably, the bank’s founder, Uday Kotak, a billionaire who owns a 25.71% share, had a fall in wealth in a single day of over ₹10,225 crore.

Furthermore, it is probable that mutual funds, which possess approximately 12.82% of Kotak Mahindra Bank, suffered losses surpassing ₹5,000 crore. Insurance companies, on the other hand, with an 8.69% stake—among which Life Insurance Corporation of India holds 6.46%—saw a collective loss of approximately ₹3,456 crore, with LIC alone experiencing a decline in its share value of approximately ₹2,569 crore.

It is anticipated that Kotak Mahindra Bank’s earnings growth will be impacted by the RBI’s action, which resulted in the suspension of online customer onboarding. Analysts at Emkay Global Financial Services, among others, have lowered their target price for the stock; the expected target price for March 2025 is now ₹1,750 per share, down from ₹1,950 earlier.

This change implies that there may not be much upside potential for the share price of Kotak Mahindra Bank in the foreseeable future, which would discourage investors. It is imperative that investors consult with qualified professionals prior to making any investing decisions.