Ujjivan investors see wealth double in a month
business Updated: Jun 04, 2016 06:28 IST
NEW DELHI: Investors of upcoming small finance bank Ujjivan Financial Services on Friday saw the value of their holdings in the company rise 90%, as the stock closed at Rs 399.50 from its listing price of Rs 210 on May 10.
The enthusiasm for the Bengaluru-based microfinance company was led by its strong financial performance, which saw Ujjivan’s profit grow 134% in 2015-16.
Some brokers said that as the company had listed its price at a discount to reduce foreign shareholding, the current sharp rise reflects the move toward its realistic valuation.
The cheer for microfinance was seen in similar stocks, with Equitas Holdings and SKS Microfinance also rallying to new 52-week highs on the BSE on Friday. Equitas holdings, which came up with an IPO in April with an issue price of Rs 110, surged 4% on Friday to Rs 187.70.
As on Friday, Equitas Holdings’ investors have seen a growth of 70.6% from the issue price. SKS was up 2.1% to Rs 678 on Friday.
Ujjivan’s net profit rose to Rs 177 crore in 2015-16, compared to Rs 77 crore in the previous fiscal
“Microfinance institutions like Ujjivan have higher yields, high return on capital, and lower NPAs. Till now, SKS was the only listed MFI. So, Ujjivan and Equitas have seen lot of interest,” said Siddharth Khemka, vice-president at Centrum Wealth Management.
First Published: Jun 04, 2016 06:28 IST