By Aditya Raghunath
Investing.com -- It’s been a tough 18 months for the financial sector, particularly for smaller financial institutions like small finance banks and small NBFCs (non-banking financial companies). Quite a few of them which listed in the recent past are trading below their issue prices.
Suryoday Small Finance Bank Ltd (NS: SURO ) with an issue price of Rs 305 in March 2021 is currently trading at Rs 201.45, down 34%. Ujjivan Small Finance Bank Ltd (NS: UJJI ) got listed in December 2019 at an issue price of Rs 37. The stock is down by 44.5%, trading at Rs 20.5. Spandana Sphoorty Financial Ltd (NS: SPAD ) got listed in August 2019 at an issue price of Rs 856. The stock has tanked by 26% is currently trading at Rs 634.
The reason for this is the pandemic’s impact on the financial books of these companies. Asset quality of these companies has taken a severe hit in the last few quarters. Suryoday SFB booked a loss of Rs 48 crore for the June Quarter as asset quality was increasingly stressed. Lockdowns put severe stress on the micro-banking sector, and Ujjivan Small Finance Bank witnessed a sharp rise in non-performing assets (NPAs). There were several top-level resignations as there were differences in how to provision against bad loans.
Spandana’s quarterly net profit came in at Rs. 53.95 crore in the June 2021 quarter, down 8.46% from Rs. 58.93 crore in the June 2020 quarter.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.