Impressive Stock Performance Amidst Market Turbulence
In a surprising turn of events on the first trading day of the week, certain stocks managed to shine despite the overall market trend. One of the standout performers was Ujjivan Small Finance Bank. During the trading session, the bank’s shares experienced an impressive surge of more than 10 percent, reaching Rs 59.50.
Resignation Sparks Ujjivan Small Finance Bank’s Rally
This significant rise in the bank’s shares followed the resignation of a key executive within the company. Specifically, Sriram Srinivasan, who held the position of Head of Digital Banking at Ujjivan Small Finance Bank Limited, announced his departure on September 30, 2023.
Exploring the Merger Proposal
Looking ahead, it’s worth noting that the bank has scheduled an extraordinary general meeting for the month of November. The primary agenda of this meeting is to discuss and brainstorm the proposed merger plan with its holding company, Ujjivan Financial Services Limited, which is based in Bengaluru.
Understanding the Merger Details
Under this proposed merger, shareholders stand to gain significantly. For every 10 shares of Ujjivan Financial Services they hold, they will receive 116 shares of Ujjivan Small Finance Bank. This merger was initially announced on October 31, 2021. Notably, Ujjivan Financial Services is an NFBC-core investment company and is the promoter of the bank, holding an impressive 73.68% equity shareholding along with 100% preference shareholding.
Strong Performance in the June Quarter
Shifting gears to financial performance, the first quarter of the current fiscal year (April-June, 2023) witnessed a remarkable upswing in Ujjivan Small Finance Bank’s profitability. The bank reported a staggering 60 percent increase in profits, reaching Rs 324 crore. This surge in profitability can be attributed to a significant reduction in bad debts, marking a substantial improvement from the April-June 2022 quarter when the bank recorded profits of Rs 203 crore.
In Summary
In summary, despite the market’s challenges, Ujjivan Small Finance Bank has managed to defy expectations with its impressive stock performance, triggered by the resignation of a key executive and anticipation surrounding a potentially game-changing merger. Additionally, the bank’s financial results for the June quarter paint a positive picture of its overall health and outlook.