Shares of Axis Bank on Friday plummeted by over 9 per cent after the MSCI said it would exclude the bank from its standard and large cap indices, and the RBI restricting foreign institutional investors from purchasing shares in the bank.
The bank scrip fell 8.69 per cent to Rs 1,050 on the BSE. It closed at Rs 1,055.40, down 8.23 per cent at the BSE.
At the NSE, it tumbled 9.36 per cent to Rs 1,042.05.
Led by the massive sell-off, the market value of the bank slipped Rs 4,426 crore to Rs 49,494 crore.
"Axis Bank fell close to 9 per cent on MSCI exclusion as well as RBI's restriction. The RBI has restricted overseas investors from purchasing additional shares given the foreign shareholding limit has been breached," said Nagji K Rita, Chairman & MD, Inventure Growth and Securities.
The MSCI (Morgan Stanley Capital International) Global Standard Indices will see the deletion of Axis Bank with effect from September 2, 2013.
Besides, the Reserve Bank on Wednesday restricted FIIs from purchasing shares in Axis Bank as the overall foreign share holding has crossed the limit of 49 per cent.
"...foreign shareholding by Global Depository Receipt (GDR)/Asset Development Reserve (ADR)/Foreign Direct Investment (FDI)/Non Resident Indian (NRI)/Persons of Indian Origin (PIO)/Foreign Institutional Investors (FIIs) in Axis Bank has crossed the overall limit of 49 per cent of its paid-up capital," RBI had said in a notification.
Therefore, no further purchases of share of this bank would be allowed through stock exchanges in India on behalf of these entities, it said.
FIIs registered with Sebi are eligible to purchase shares and convertible debentures issued by Indian companies under the Portfolio Investment Scheme (PIS).