Utkarsh Small Finance Bank Share Price: Shares Surge 17% to Record High

Utkarsh Small Finance Bank (SFB) has been making headlines in the stock market with its remarkable performance. The bank’s shares rallied 17% to reach a new high of Rs 56.30 on the Bombay Stock Exchange (BSE) during Monday’s intra-day trade. This surge comes on the heels of the bank’s strong market debut on Friday.

Investors have been rewarded handsomely since the bank’s listing, as the stock price has more-than-doubled, registering a staggering 125% increase against its issue price of Rs 25 per share. Notably, the shares surged 92% on the first day of its listing, indicating strong demand and confidence among investors.

Utkarsh Small Finance Bank Share Price

At 11:23 am, Utkarsh SFB was quoting 16% higher at Rs 55.68 as compared to a marginal 0.06% gain in the S&P BSE Sensex. The trading volume has been significant, with a combined 83.7 million shares changing hands on both the National Stock Exchange (NSE) and BSE.

One of the key factors driving the bank’s growth is its focus on underserved segments of the population, particularly through its micro-banking loans, which constitute 66% of its gross loan portfolio. Over the years, the bank has strategically diversified its portfolio, leading to a 31% CAGR in the gross loan portfolio to Rs 14,000 crore by FY23.

Additionally, Utkarsh SFB’s strong geographic presence in 26 states and union territories, with 830 banking outlets, has contributed to its impressive growth. The bank also offers a wide range of services, including savings/current accounts, deposit accounts, and non-credit offerings such as debit cards and bill payments, catering to retail customers and ensuring access to low-cost funding and longer tenure resources.

While the bank’s performance has garnered attention and a strong return profile, brokerage firm InCred Equities believes that the stock has significant re-rating potential, further driving investor interest.

However, some analysts caution that the bank’s shift from high-yield business (MFI lending) to moderate-yield ones may impact overall yields and margins in the mid to long term. Despite this, Utkarsh SFB’s strong relationship with its micro-banking customers enables it to cross-sell other asset products, catering to the entire customer lifecycle.

Utkarsh Small Finance Bank’s remarkable performance and growth potential have positioned it as a notable player in the banking sector. Investors are advised to carefully consider the bank’s offerings before making investment decisions, as market dynamics continue to influence its stock price.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Sharedhan. We advise investors to check with certified experts before taking any investment decisions.


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