Shares of Ujjivan Financial Services (down 7 per cent at Rs 105) and Ujjivan Small Finance Bank (down 3 per cent at Rs 17.40) hit their respective 52-week lows on the BSE in Monday's intra-day trade. These stocks have corrected 60 per cent and 55 per cent, respectively from their 52-week highs level. In comparison, the S&P BSE Sensex was down 0.83 per cent at 57,353 points at 10:19 AM.
Since August 20, 2021, the stock of Ujjivan SFB has slipped 28 per cent after the exit of multiple board members and management executives, including Nitin Chugh. It has appointed an old hand, Ittira Davis, as MD & CEO after the exit of Nitin Chugh.
Ujjivan Financial Services is a non-operating holding company (holdco) with sole 83.32 per cent ownership of Ujjivan SFB and it does not have any other business interest.
Analysts at Emkay Global Financial Services have "Sell" rating on Ujjivan Small Finance Bank (SFB) with a revised target price of Rs 13. The brokerage firm also has "Sell" rating on the holding company Ujjivan Financial Services and a target price of Rs 123.
Ujjivan SFB has applied to the regulators for a reverse merger and will be raising capital through a qualified institutional placement (QIP) of Rs 600 crore to meet the minimum shareholding norms for the merger, leading to further RoE dilution.
"Though we believe management issues seem to be settled for now with the appointment of an internal candidate as MD & CEO, the bank will require transformational leadership to become a new-age universal bank. MFI dominance, weak asset quality, and sub-par liability/return profiles remain key concerns," the brokerage firm said.
 "Ujjivan Small Finance Bank")