Shares of smaller private sector banking shares have been soaring ever since the takeover of ING Vysya Bank by Kotak Mahindra Bank.

On Wednesday the stock of Lakshmi Vilas Bank rose almost 3 per cent in a falling market on reports of a likely takeover. Shares in South Indian Bank saw a huge block deal this week.

Take a look at how stock prices of private sector banks who are strong takeover targets have moved in the last few months.

In the past there have been several smaller private sector banks that have been taken over. Times Bank was taken over by HDFC Bank, whereas Bank of Punjab and Centurion Bank which merged was again takeover by HDFC Bank. Bank of Rajasthan was taken over by ICICI Bank.

Some of the banks mentioned above have a superb network and hence remain potential takeover targets, though in some cases the non performing assets remain a matter of grave concern.

Setting up of new branches for the larger private sector banks remains a big concern and entering into mergers and acquisition remains the best way for expanding for the larger private sector banks like HDFC Bank and ICICI Bank.

It's extremely doubtful that any other banks have the potential to takeover these banks.

It's highly likely that several other banks in the country would remain strong potential targets for a takeover.

Some of these like Karnataka Bank have been in the news for many years now. One will need to wait and watch when these banks will be takeover or if they ever will.

GoodReturns.in