Bandhan Bank’s stake rose 8 percent today after Assam’s government announced incentives as well as incentives for microfinance institution (MFI) loans.
Shares ended 7.91 percent higher at 341.10 euros compared to the previous close of 316.10. The company’s market capitalization rose to 54,938.06 kroner on BSE.
He has earned 14 percent in the last month. The share is higher than five, 10 days, 20 days, 50 days, 100 days and 200 days of moving averages.
ICICI Securities said Bandhan Bank had witnessed several favorable events over the past week.
First, the RBI’s MFI harmonization consultation document reduces the bank’s concerns about being subject to a maximum number of lenders or an interest rate cap.
Second, the Assam government’s decision to provide assistance, as well as incentives for MFI loans, will partially address one of the key concerns about the increased stress levels in Assam (14% in 90+ dpd and 11% in Assam bins from 31-90 dpd from March ’21).
“Bandhan Bank, with its largest market share in Assam (> 55% market share with an exposure of € 70 billion), will naturally benefit from a scheme designed to maintain a credit culture and promote responsible repayment behavior,” she noted.
“However, it is difficult to quantify the extent of the impact as borrowers’ indebtedness of only up to HRK 125 million is acceptable and Bandhan is actively shifting the borrower from MFIs to individual loans, ”the brokerage house added.
Credit Suisse upgraded the shares to ‘better performance’ and raised the target price to Rs 390 per share.
“The government’s MFI aid package will help recovery and credit costs. However, potential stress from the second wave will keep the slip on the rise,” the brokerage house said.
However, CLSA retained the call for poor stock sales with a target price of Rs 300 per share.
“The government’s MFI package of government should provide significant relief and will be positive on credit for Assam’s portfolio, but the impact of the second wave of COVID-19 could be large,” the brokerage house noted.
Assam’s government is holding ongoing talks with MFIs, after which the remaining loan amount has been reduced to 8,250 kroner from 12,500 kroner, which will be used by 22 easy poor and poor women of the state, Himanta Biswa Sarma, Assam’s chief minister told a news conference. Friday.
“The outstanding loan has decreased as MFIs have overturned the standards set by the Reserve Bank of India (RBI) and these include giving a loan of more than 1.25 lakhs to one group or giving more loans to one person or group,” he added.