Bandhan Bank surges 19% in four days after RBI nod for opening new branches

The stock was trading higher for the fourth straight day, up 4% at Rs 556 on the BSE.

Shares of Bandhan Bank were trading higher for the fourth straight session, rising 4% to Rs 556 on the BSE, after the Kolkata-based private sector lender received prior approval from the Reserve Bank of India (RBI) to open new branches.

In the past four trading days, Bandhan Bank has rallied 19% from Rs 469 on December 11, as compared to a 3% rise in the S&P BSE Sensex.

Bandhan Bank, which has been restricted by the RBI from opening new branches without its approval, opened five on Wednesday, December 12, and plans 40 more before the end of this month.

The RBI had in September barred the bank from opening new branches without its approval and ordered the bank to freeze the salary of its chief executive over its failure to bring down promoters’ stake to 40% from close to 82%, within the stipulated deadline.

The Bank had said it is taking necessary steps to comply with the licensing condition to bring down the shareholding of Non-Operative Financial Holding Company (NOFHC) in the Bank to 40% and shall continue to engage with RBI in this behalf.

The stock of Bandhan Bank had corrected 33% between October 1 and October 25, against a 7% decline in the benchmark index. It touched a 52-week low of Rs 369 on October 26, in intra-day trade.

At 11:06 am; Bandhan Bank was trading 3.6% higher at Rs 552 on the BSE, as compared to 0.81% rise in the S&P BSE Sensex. A combined 936,154 equity shares changed hands on the counter on the BSE and NSE so far.