Kolkata-based Bandhan Bank is expected to outperform and Current Market Price (CMP) is expected to touch Rs 390 per piece. This is mainly because political parties have not mentioned loan waiver in their respective manifesto. This will come as a relief to all the micro-finance institutions and Bandhan Bank that has huge presence in those regions.
According to CLSA, Bandhan Bank will outperform. Meanwhile, Jefferies stated elections start at the end of March-April 2021; improvement in collections can offer upside risk to earnings. “Earnings rebound can drive rerating. We expect Bandhan Bank’s earnings to rebound post 1HFY22 as credit costs fall from 5 per ecnt of average loans in FY21 to 2 per cent over FY 23-24…”
BJP’s election manifesto for Assam and West Bengal does not propose loan waivers, but suggests some other forms of assistance to stressed borrowers at least in Assam.
At present, stock of Bandhan Bank, is down by 2.03 per cent or 7.25 points, is trading at Rs 350.10 per piece. Today the market is trading in red, Sensex was down by almost 500 points at 10.38 am.
Meanwhile, on Wednesday former RBI deputy governor Harun Rashid Khan informed the exchange through the bank that it is not seeking re-appointment as independent director on its board after completion of his term later this week. Khan was brought on-board Bandhan Bank from March 26, 2018 for a period of three years. His first term would come to end at the close of business hours on March 26, 2021, Bandhan Bank said in a regulatory filing.