Ace investor Mukul Agrawal, known for his strategic bets in emerging banking and midcap stocks, has acquired a fresh stake in Jammu & Kashmir Bank (J&K Bank) during the June 2025 quarter, sparking strong market interest and renewed focus on the bank’s growth trajectory under ongoing structural reforms.
Mukul Agrawal’s strategic purchase: Key details
Exchange filings reveal that Mukul Agrawal has purchased 1.3% stake in J&K Bank, equivalent to nearly 1.25 crore equity shares, through open market transactions during Q1 FY26.
Highlights of the investment:
- Investor: Mukul Mahavir Agrawal
- Stock: Jammu & Kashmir Bank Ltd
- Stake acquired: ~1.3%
- Number of shares: ~1.25 crore
- Quarter: April-June 2025
- Mode: Open market purchases
This makes Agrawal one of the prominent individual shareholders in the bank, reflecting his continued bullish stance on Indian financial sector recovery, regional bank transformation stories, and the upcoming private capex-led credit growth cycle.
Why is J&K Bank attracting ace investors?
J&K Bank, headquartered in Srinagar, has been undergoing significant structural, governance, and asset quality reforms over the past two years under MD & CEO Baldev Prakash. Key factors making it an attractive bet include:
- Strong profit growth: Net profit surged by over 35% YoY in FY25, aided by robust net interest margins (NIMs) and treasury gains.
- Improving asset quality: Gross NPA ratio has come down to below 6%, while Net NPA has dipped under 2%, indicating effective resolution and recovery efforts.
- Aggressive CASA mobilisation: CASA (Current Account Savings Account) ratio continues to remain strong at ~54%, providing stable low-cost funding.
- Loan book diversification: Expanding beyond the traditional Jammu & Kashmir and Ladakh regions into pan-India SME, housing, and retail loans to de-risk portfolio concentration.
- Attractive valuation: Despite the strong performance, the bank trades at a Price to Book (P/B) multiple of around 0.6x, making it relatively undervalued compared to peers.
- Upcoming policy tailwinds: Revival in tourism, horticulture, and infrastructure investments in J&K and Ladakh regions are expected to boost regional credit growth.
Recent J&K Bank performance snapshot
| Metric | Q4 FY25 | Q4 FY24 | YoY Change |
|---|---|---|---|
| Net Profit | ₹400 crore | ₹295 crore | +35.5% |
| Gross NPA | 5.8% | 7.5% | Improvement |
| Net NPA | 1.7% | 2.3% | Improvement |
| Net Interest Margin (NIM) | 3.75% | 3.40% | Expansion |
| Provision Coverage Ratio | 90.2% | 86.7% | Strengthened |
| CASA Ratio | 54.2% | 55.1% | Stable |
Who is Mukul Agrawal and why does his investment matter?
Mukul Agrawal is among India’s most respected individual investors, managing a portfolio of over ₹3,000 crore as per recent filings. He is known for identifying turnaround stories, midcap banks, NBFCs, and niche manufacturing plays with strong management and growth potential.
Recent key investments:
| Stock | Stake (%) | Sector |
|---|---|---|
| Radico Khaitan | 1.9% | Liquor |
| Apollo Pipes | 2.4% | Plastic pipes |
| Paras Defence | 2.5% | Defence manufacturing |
| Indian Bank | 1.1% | PSU Banking |
| J&K Bank | 1.3% | Regional banking |
His entry into J&K Bank is being interpreted by market analysts as a strong vote of confidence in the bank’s medium-term growth and profitability trajectory.
Analysts’ view on J&K Bank stock post Agrawal’s entry
Brokerage and market experts suggest:
- Undervalued PSU bank play: J&K Bank offers an attractive investment case among PSU and regional banks with upside potential as credit growth picks up.
- Better asset quality metrics: Compared to other regional banks, J&K Bank has demonstrated consistent improvement in recoveries and prudent provisioning.
- Potential re-rating trigger: Entry of marquee investors like Mukul Agrawal may drive institutional buying interest, especially as the bank continues to report improved quarterly results.
What are the potential risks?
Despite its turnaround, certain macro and bank-specific risks remain:
- Regional economic dependency: Heavy reliance on J&K economy performance and government schemes.
- Geopolitical and security sensitivities: Any deterioration in regional stability can impact banking operations and collections.
- Management continuity: Strong leadership execution is critical to maintain asset quality momentum and growth.
Recent strategic initiatives by J&K Bank
The bank has undertaken several reforms over the past year:
- Digital transformation drive: Rapid scale-up of mobile banking, digital payments, and SME onboarding platforms.
- Credit underwriting revamp: Adoption of AI-led risk assessment tools to enhance asset quality.
- Workforce optimisation: Voluntary retirement schemes and redeployment to improve productivity.
- Expansion plans: Selective branch expansion in Punjab, Delhi NCR, and northern states to diversify portfolio.
- Strengthening governance: Adherence to RBI guidelines on board structures, audit committees, and risk management practices.
Mukul Agrawal’s investing philosophy: Strategic patience
Agrawal is known for his approach of strategic patience, where he:
- Identifies under-researched or undervalued companies with turnaround triggers
- Acquires meaningful stakes (often 1-3%)
- Holds for multiple quarters to capture full re-rating and earnings growth cycle
His portfolio approach combines core holdings in emerging banks and manufacturing with tactical short-term bets, aiming for superior compounded returns.
Outlook for J&K Bank
With Mukul Agrawal’s entry, analysts forecast:
- Further stock re-rating if NIMs remain robust and GNPA continues to decline.
- Potential for higher institutional holding, given improving RoE and governance track record.
- Opportunities from upcoming hydropower, road, and tourism investments in Jammu & Kashmir and Ladakh, expected to drive SME and retail credit demand.
Conclusion
The acquisition of a 1.3% stake in Jammu & Kashmir Bank by ace investor Mukul Agrawal during the June quarter underlines his confidence in the bank’s turnaround story. With improving financial performance, strong management focus, and an attractive valuation compared to peers, J&K Bank is poised to remain on the radar of value and turnaround-focused investors in the upcoming quarters.
Disclaimer: This article is for informational purposes only. Investments in stocks are subject to market risks. Readers are advised to conduct their own due diligence or consult their financial advisor before taking any investment decision based on this content.
