Ujjivan Small Finance Bank bags scheduled bank status, stock surge over 6 per cent

Ujjivan Financial Services Limited witnessed a stark rise on the bourses, rising over 6 per cent in Wednesday’s trade, with its subsidiary bagging the status of a scheduled bank.

The company’s subsidiary Ujjivan Small Finance Bank Limited was conferred with the status of a scheduled bank by the Reserve Bank of India. Following the news, the stock touched its six week high of Rs 346, up by 6.43 per cent.

The scheduled bank status of the financial body is expected to bring in more deposits and is also likely to get funding facilities with more ease. The bank will also be able to issue certificate of deposit to escalate its deposit base.  

Ujjivan Financial Services Limited has posted a net loss of Rs 75 crore for the first quarter of FY18 as against a profit of Rs 17.37 crore for the corresponding period in the previous year. The loss was mainly attributed to the poor recovery of loans post demonetization, along with the company’s transition into a small finance bank from a microfinance institution.

However, the stock has witnessed a surge of around 64.8 per cent on the bourses, since the financial company got listed in May 2016.