Shares of Kotak Mahindra Bank Ltd rose in early trade on July 1 after multiple brokerages maintained their bullish stance following the lender's announcement that it will acquire Deutsche Bank India's retail banking, affluent private banking and wealth management business.

The stock gained 0.92 percent to Rs 395.85 in early trade. Kotak Mahindra Bank shares are down 9.3 percent over the past year, compared with a 6.6 percent decline in the Nifty 50. The lender has a market capitalisation of about Rs 3.9 lakh crore.

HSBC maintained its "Buy" rating on Kotak Mahindra Bank stock with a target price of Rs 460 per share, implying an upside of more than 16 percent from current levels. The brokerage said the acquisition will add 5.6 percent to Kotak's loan book, 2.8 percent to deposits and 1.7 percent to its current account and savings account (CASA) base. It added that the transaction does not result in any meaningful change to its investment outlook.

Nomura also retained its "Buy" rating with a target price of Rs 460. The brokerage said the acquisition has been priced close to book value and gives Kotak access to a quality secured loan book. It said that the liability franchise being acquired is relatively weaker, while adding that the capital impact is manageable. Nomura said the eventual benefits from the transaction will depend on successful integration and client retention.

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Jefferies maintained its "Buy" rating with a target price of Rs 450 per share. According to the brokerage, the acquisition will add around 6 percent to Kotak's loan book, 3 percent to deposits and 1 percent to assets under management. It said the deal appears earnings accretive and offers cross-selling opportunities, while consuming around 84 basis points of CET1 capital. Jefferies also said the transaction may help Deutsche Bank simplify its business in India.

CLSA retained its "Outperform" rating on the stock with a target price of Rs 440. The brokerage noted that the transaction includes a loan book of about Rs 29,000 crore, deposits of Rs 16,000 crore and assets under management of Rs 10,500 crore. It said the purchase consideration comprises Rs 280 crore plus a net asset adjustment, while profitability details were not disclosed. CLSA added that Kotak's management expects the transaction to be return on equity accretive.

Kotak Mahindra Bank on June 30 announced that it will acquire Deutsche Bank India's retail banking, affluent private banking and wealth management business for Rs 282 crore. The business being acquired serves around 1.5 lakh customers and includes about 1,000 employees, who are expected to join Kotak as part of the transaction. The acquisition is expected to close by September 2027, subject to regulatory approvals, including clearance from the Competition Commission of India, and other customary conditions.

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