Banking shares mainly private sector have rallied by up to 5% on the bourses after the Cabinet today cleared a proposal to merge the limits of foreign direct and portfolio investments into composite caps to make foreign investment regime easier.

Axis Bank, Kotak Mahindra Bank, YES Bank, HDFC Bank and ICICI Bank were up 1%-5% on the National Stock Exchange (NSE).

Shares of Kotak Mahindra Bank were trading higher by 2% at Rs 1,458 on the NSE early this morning after the Foreign Investment Promotion Board (FIPB) on Friday cleared the bank’s proposal to raise foreign investment limit in the lender to 55%. The CNX Nifty was down 0.78% at 8,419 points.

Kotak Mahindra Bank had approached FIPB after the Reserve Bank of India barred overseas investments in it as foreign shareholding hit the permissible threshold following the merger with ING Vysya Bank. Investments from foreign institutional investors (FIIs), foreign portfolio investors (FPIs) and foreign banks had reached 48.55% in the merged entity.

Shareholders on Monday gave approval to Kotak Mahindra Bank's proposal for issuance of bonus shares.

The annual general meeting held on Monday approved issuance of “bonus shares in the proportion of one equity share for every equity share of face value Rs 5 held by such person on the record date,” Kotak Mahindra Bank said in a filing to the BSE.

Kotak Mahindra Bank and ING Bank have joined hands for exploring opportunities arising from cross-border business, investment and trade flows across various regions, including Europe.

A memorandum of understanding (MoU), signed between the two, covers an array of co-operation in areas such as trade finance, remittances and services related to non-resident Indians, funding to counterparties' corporate relationships, fee-based products, direct banking and digital strategy, and cross-border debt capital markets and mergers and acquisitions.

Adopting a segregated brand and product approach to address both personal and commercial usage segments, Tata Motors has decided that only old car brands, starting with Indica and Indigo, will ply in taxi segment as it looks for a stronger presence in personal usage market.

The company, better known for its cars in the taxi segment, is trying to overcome a “unique social perspective (in India) that a brand which does well in the commercial market, nobody wants to buy for personal usage segment”.

Strong beat in Q4: Q4FY15 profit after tax of Rs 9.1 bn (+38% year-on-year) was better than expected with a beat on both lending and capital market businesses. For the lending business, not only is the revenue momentum picking up but also some of the fundamental metrics like CASA (current account savings account) and fee intensity performance is better than expected, and with buoyant capital markets we are finally seeing capital market profitability improving. We have nothing much to complain about; our only constraint remains rich valuations (3.4x FY17 book). Thus we maintain our Neutral rating.

Shares of Kotak Mahindra Bank are trading flat at Rs 1,373, recovering 1.5% from its early morning low on the National Stock Exchange (NSE), after new shares issued by the private sector lender on amalgamation of ING Vysya Bank were permitted for trade from today.

“The new securities of 139.21 million equity shares of Rs 5 each issued pursuant to the scheme of amalgamation of ING Vysya Bank with Kotak Mahindra Bank are listed and permitted for trading on the exchange with effect from Monday, April 27, 2015,” Kotak Mahindra Bank said in a notification to the BSE.

The Foreign Investment Promotion Board (FIPB), headed by Finance Secretary Rajiv Mehrishi, will meet on April 30 to discuss 41 proposals.

These including one from Kotak Mahindra Bank (KMB) to raise its foreign investment ceiling to 55 per cent. At present, foreign investors together hold 48.5 per cent in it, pursuant to its merger with ING Vysya Bank. Foreign investors can acquire up to 49 per cent stake in Indian lenders through the automatic route; beyond this, FIPB permission is required.

Shares of Kotak Mahindra Bank and ING Vysya Bank have touched their respective lifetime highs today ahead of record date fixed for the merger.

At 1321 hours, shares of Kotak Mahindra Bank were up 1% at Rs 1,459 on the National Stock Exchange (NSE). It opened at Rs 1,447 and hit a record high of Rs 1,475 in early morning trade.

The merger deal between Kotak Mahindra Bank and ING Vysya Bank has received the Reserve Bank's approval, which would create the country's fourth largest private sector lender.

"The scheme of amalgamation (of Kotak Mahindra Bank and ING Vysya Bank) shall come into effect from April 1, 2015," Kotak Mahindra Bank said in a statement quoting RBI approval. It got RBI approval for the merger yesterday.

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