Karnataka Bank shares rally nearly 24% in three sessions after Cupid promoter’s stake purchase

Karnataka Bank shares extended their steep gains for a third straight session on Tuesday, closing 8.9 percent higher at Rs 216.5. The stock has now risen nearly 24 percent over three days, fuelled by buying interest after Cupid Ltd’s promoter Aditya Kumar Halwasiya acquired shares in the mid-sized private lender late last week.

Meanwhile, Cupid Ltd shares have seen a spectacular run themselves, more than quadrupling over the past one year with a 302 percent gain. Promoters hold 45.55 percent equity stake in the company.

Data from the NSE showed that Halwasiya -- Chairman and Managing Director of Cupid Ltd -- purchased 38 lakh shares of Karnataka Bank on Friday. Halwasiya’s name did not appear in Karnataka Bank’s September quarter shareholding pattern prior to this transaction.

The buying in Karnataka Bank shares lifted stock by 8 percent on Friday. The up-move continued with a 6 percent rise on Monday and a further jump on Tuesday, accompanied by elevated trading action. On Monday morning alone, 2.1 crore shares changed hands within minutes of the opening bell, more than half of Friday’s full-day volume of 3.7 crore shares.

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Karnataka Bank does not have a promoter group; its ownership is spread across institutional and retail shareholders. Quant Smallcap Fund holds 3.9 percent, Bandhan MF owns 2.56 percent, HDFC Life has 3.59 percent, and LIC owns 1.62 percent. Retail shareholders with authorised share capital of up to Rs 2 lakh together hold 36.19 percent of the bank.

The buying also marks Halwasiya’s second recent investment in a mid-sized bank, following an earlier stake purchase in South Indian Bank in October. Karnataka Bank now commands a market capitalisation of Rs 8,151 crore at the end of Tuesday’s session. In comparison, Cupid Ltd closed with a market cap of around Rs 9,000 crore.