Shares of Axis Bank on Monday declined over 5 per cent after S&P Global Ratings lowered its ratings of the lender due to increased economic risks for banks operating in India.
The stock plunged 5.21 per cent to Rs 402.90 on BSE. On NSE, it tanked 5.29 per cent to Rs 402.35.
"We lowered our ratings on Axis to reflect our expectation that heightened economic risks facing India's banking system will affect the bank's asset quality and financial performance," S&P said on Friday.
While Axis Bank's asset quality is superior to the Indian banking sector average, its level of non-performing assets will likely remain high compared to international peers, it noted.
The agency said economic conditions have turned adverse for Indian banks due to COVID-19 and drastic efforts to curtail the spread of the virus have resulted in a sharp economic contraction.
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