Stock Market Trading Tips: Kotak Mahindra Bank tops ICICI Bank in market value

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India's fourth-largest bank by assets Kotak Mahindra Bank is now the second most valuable private lender, having overtaken ICICI Bank, the country's largest private lender by assets, in market value.

On Wednesday, Kotak Bank's market capitalisation raced to Rs 1.22 lakh crore, surpassing ICICI Bank's Rs 1.19 lakh crore. The market capitalisation of HDFC Bank, the biggest private lender by valuation, was Rs 2.64 lakh on Wednesday. 

In 2015, ICICI Bank's market capitalisation was more than double Kotak's. ICICI Bank BSE -3.09 % shares have underperformed peers in the past year owing to worries about its assets quality. Kotak shares have surged 23% in a year, while ICICI Bank's stock has fallen over 40%.

Analysts, however, are more bullish on ICICI Bank than on Kotak Bank BSE -1.57 % due to cheaper valuation.

"From a valuation perspective, Kotak Bank is overvalued at the moment, as the market believes it is on a high-growth trajectory, while they believe there are concerns on ICICI Bank's asset quality," said Suruchi Jain. She recommends ICICI Bank over Kotak Bank as the latter trades at a price to fair value ratio of 1.15, which is 15% premium to its fair value. ICICI Bank trades at a price to fair value ratio of 0.64.