Private sector banks in India lead market cap surge; Axis Bank grows by 20.9%: S&P GCI

India's private sector banks have emerged as significant gainers in market capitalization over the last quarter, with Axis Bank Ltd. stood out with 20.9% rise in market capitalization, reaching 3.911 trillion rupees, according to the latest analysis by S&P Global Market Intelligence.

The data highlights a surge in the market capitalization of private sector banks for the three months ending June 30, with the sector showing stronger metrics compared to their public sector counterparts.HDFC Bank Ltd., also demonstrated, with its market capitalization climbing by 16.5% to an astounding 12.811 trillion rupees.

Other private sector banks also exhibited positive trends, except for IndusInd Bank Ltd., which saw a decline in market capitalization.

However, the majority of private sector banks among the top 20 largest banks in India experienced growth, marking a strong quarter for the sector.

The analysis revealed that 16 out of the 20 largest banks in India recorded an increase in market capitalization during the quarter.

Notably, five banks achieved double-digit growth, highlighting a robust recovery and positive investor sentiment in the sector.

Conversely, three of the four banks that saw their market capitalization decrease were public sector banks, namely Bank of India Ltd., Union Bank of India, and Punjab National Bank.

This trend indicates a divergence in performance between private and public sector banks.The rankings of the top five banks remained unchanged during the quarter, with HDFC Bank maintaining its position as the leader. ICICI Bank Ltd. continued to hold the second spot, while State Bank of India (SBI), the largest lender by assets in India, secured the third position.

Axis Bank and Kotak Mahindra Bank Ltd. retained their places in fourth and fifth positions, respectively.

A notable new entrant to the top 20 list was AU Small Finance Bank Ltd., which made a significant leap to the 19th position.

The bank's market capitalization surged by 32.1% to 499.4 billion rupees, reflecting its growing market presence and investor confidence.Several factors have contributed to the robust performance of private sector banks in India. Improved asset quality, higher credit growth, and increased profitability have been key drivers of their financial performance.

Additionally, the Indian stock market has shown resilience and growth, further boosting investor confidence in the banking sector.

The favorable economic environment, coupled with regulatory support and reforms, has also played a crucial role in enhancing the performance of private sector banks.

These banks have been successful in leveraging technology and innovation to expand their customer base and improve operational efficiency, thereby driving growth in their market capitalization.