Bandhan Bank spurts on value buying

Bandhan Bank surged 16.77% to Rs 195.35 on bargain hunting after recent a recent steep slide.

Shares of the private bank fell 33.14% in five sessions to end at Rs 167.30, from a recent closing high of Rs 250.25 recorded on 27 March 2020.

Meanwhile, the bank on 1 April 2020 had informed that the credit ratings agency CRISIL had reaffirmed its rating on various debt instruments of the company worth Rs 12,710 crore. The ratings agency said that the rating continues to reflect Bandhan's strong market position in the micro loan segment, expected benefits from portfolio diversification driven by amalgamation with Gruh (an erstwhile subsidiary of Housing Development Finance Corporation), strong profitability, robust capitalisation, healthy resource profile supported by demonstrated ability to build up a retail deposit franchise and healthy reported asset quality over the past four years.

These strengths are partially offset by geographic concentration in operations and exposure to local socio-political risks inherent in the micro loan business, modest credit profile of borrowers, and potential risk of regulatory strictures linked to non-dilution of promoter holding.

Additionally, any higher than expected deposit outflow or prolongation in Covid-19 linked lockdown could impact the bank adversely and will be key rating sensitivity factors, CRISIL said.

On a standalone basis, the private lender's net profit jumped 120.7% to Rs 731.03 crore on a 63.3% surge in total income to Rs 3,075.34 crore in Q3 December 2019 over Q3 December 2018.

Bandhan Bank is a commercial bank, which offers a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services.

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