Investors are scouting an unlikely corner of the stock market: Indian private sector banks

, which went from a price-to-book ratio of 5.5 to 4, is the most expensive among large private sector banks.The severity of the sell-off seems excessive to some investors and analysts, who believe shares of large banks, many of which have sturdy balance sheets and a modest exposure to the most susceptible pockets of the economy, are now looking relatively cheap compared to their fundamentals.

The central bank of India also announced a three-month moratorium on all term loans. Self-employed and small business borrowers will be most impacted and the trickle-down of stimulus benefits may be delayed, Credit Suisse said in a note."The market is witnessing huge short selling. Unlike many global markets in Europe and Southeast Asia, India has not banned short selling which is leading to a lot of hedge funds creating panic in the market.

"Banks like HDFC Bank, ICICI Bank & Kotak Mahindra Bank saw growth in deposits & loans, that exceeded the industry average in Q4. The recent price action in financials suggests larger, well-run private banks are getting differentiated over smaller private banks," Chadha said. Indian companies typically follow a financial year that runs from April to March.

Axis, ICICI Bank, IndusInd Bank, and RBL Bank are the next best-placed banks at 10-12% of their total loan book. State-owned banks and Federal Bank at 2%-5% of loans, are the most vulnerable.

Banking is risky business all heartless shareholders should take the smooth and the rough

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