External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

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Equity Bottom-Up

Ujjivan Small Finance Bank / Equity Bottom-Up

<div><div><div><div><ul><li>We interacted with the team at Ujjivan Small Finance Bank (UJSFB) to understand the business strategy and growth prospects over the medium term as the business stabilizes after facing multiple challenges in the form of top-level management rejig and asset quality concerns owing to COVID related disruption.</li><li>Our key takeaways from the discussion have been that the bank’s growth appetite remains strong as demand across segments remains buoyant, led by the MFI segment and steady improvement in asset quality continues.</li><li>In the past decade, the microfinance industry has faced 2 black-swan events in the form of – (a) Demonetization and (b) COVID-19.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We interacted with the team at Ujjivan Small Finance Bank (UJSFB) to understand the business strategy and growth prospects over the medium term as the business stabilizes after facing multiple challenges in the form of top-level management rejig and asset quality concerns owing to COVID related disruption.Our key takeaways from the discussion have been that the bank’s growth appetite remains strong as demand across segments remains buoyant, led by the MFI segment and steady improvement in asset quality continues.In the past decade, the microfinance industry has faced 2 black-swan events in the form of – (a) Demonetization and (b) COVID-19.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ujjivan Small Finance Bank - Ready to Embark on a Growth Journey!

Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Forensic Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ujjivan-financial-services" target="_blank" data-smartkarma-citation="entities:22697:1" rel="noopener">Ujjivan Financial Services (UJJIVAN IN)</a> had announced a reverse merger back in October 2021 where the holding company (Ujjivan FS) will be merged with <a href="https://www.smartkarma.com/entities/ujjivan-small-finance-bank-limited" target="_blank" data-smartkarma-citation="entities:28443:1" rel="noopener">Ujjivan Small Finance Bank (UJJIVANS IN)</a>.</li>
<li>The share swap ratio given in the scheme of amalgamation clearly showcases a significant merger arbitrage opportunity.</li>
<li>However, there has been no major interest in this very visible opportunity. We try to justify the market behavior.</li>
</ul>



Ujjivan Financial Services (UJJIVAN IN) had announced a reverse merger back in October 2021 where the holding company (Ujjivan FS) will be merged with Ujjivan Small Finance Bank (UJJIVANS IN).
The share swap ratio given in the scheme of amalgamation clearly showcases a significant merger arbitrage opportunity.
However, there has been no major interest in this very visible opportunity. We try to justify the market behavior.


Ujjivan Reverse Merger: Behind the Dull Response

<ul><li>Ujjivan Small Finance Bank’s (UJSFB) Q3FY22 performance was ahead of our expectations with a sharp improvement in asset quality and a bounceback in business momentum</li><li>GNPA declined to 9.8% as of Dec’21 vs 11.8% in Sept’21 as the bank wrote off loans worth Rs 152 Cr during the quarter</li><li>The management has indicated that despite the rise in COVID-19 cases, business momentum has not witnessed any major disruption</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Ujjivan Small Finance Bank’s (UJSFB) Q3FY22 performance was ahead of our expectations with a sharp improvement in asset quality and a bounceback in business momentumGNPA declined to 9.8% as of Dec’21 vs 11.8% in Sept’21 as the bank wrote off loans worth Rs 152 Cr during the quarterThe management has indicated that despite the rise in COVID-19 cases, business momentum has not witnessed any major disruptionContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ujjivan Small Finance Bank: Asset Quality Improves QoQ; Business Momentum Remains Strong

<ul>
<li>We maintain our HOLD rating given the delay in the ROE normalization, higher restructured pool with concerns of elevated slippages</li>
<li>We introduce FY24E estimates and value UJSFB at 1.4x H1FY24E ABV to arrive at a target price of Rs 20/share, implying a downside of 5% from CMP</li>
<li>UJSFB’s Q2FY22 performance was disappointing in terms of asset quality as GNPA inched up to 11.8% (vs 9.8% QoQ) </li>
</ul>
<div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>


We maintain our HOLD rating given the delay in the ROE normalization, higher restructured pool with concerns of elevated slippages
We introduce FY24E estimates and value UJSFB at 1.4x H1FY24E ABV to arrive at a target price of Rs 20/share, implying a downside of 5% from CMP
UJSFB’s Q2FY22 performance was disappointing in terms of asset quality as GNPA inched up to 11.8% (vs 9.8% QoQ) 

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ujjivan Small Finance Bank: Asset Quality Stress Persist, Business Momentum Regaining Strength

<p>We maintain our BUY recommendation and value UJSFB at 1.7x FY23E ABV to arrive at a target price of Rs 32/share, implying an upside of 17% from CMP.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We maintain our BUY recommendation and value UJSFB at 1.7x FY23E ABV to arrive at a target price of Rs 32/share, implying an upside of 17% from CMP.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ujjivan Small Finance Bank: Asset Quality Stress Persist, Improvement Visible in Jul 21 Collections

India

Ujjivan Small Finance Bank Ltd. is a mass-market focused bank in India, primarily serving financially unserved and underserved segments. It offers a comprehensive range of banking products and services, including savings and current accounts, fixed and recurring deposits, and various loans such as microfinance, housing, agriculture, vehicle, and MSME loans. The bank is headquartered in Bengaluru, Karnataka, India, and commenced banking operations on February 1, 2017.

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Ujjivan Small Finance Bank (UJJIVANS IN)

Ujjivan Small Finance Bank - Ready to Embark on a Growth Journey!

Our key takeaways from the discussion have been that the bank’s growth appetite remains strong as demand across segments remains buoyant

Axis Direct

Ujjivan Reverse Merger: Behind the Dull Response

The share swap ratio clearly showcases a significant merger arbitrage opportunity. However, there has been no major interest in this very visible...

Nitin Mangal

Ujjivan Small Finance Bank: Asset Quality Improves QoQ; Business Momentum Remains Strong

The management has indicated that despite the rise in COVID-19 cases, business momentum has not witnessed any major disruption and monthly...

Axis Direct

Ujjivan Small Finance Bank: Asset Quality Stress Persist, Business Momentum Regaining Strength

We maintain our HOLD rating given the delay in the ROE normalization, higher restructured pool with concerns of elevated slippages especially from...

Axis Direct

Ujjivan Small Finance Bank: Asset Quality Stress Persist, Improvement Visible in Jul 21 Collections

We maintain our BUY recommendation and value UJSFB at 1.7x FY23E ABV to arrive at a target price of Rs 32/share, implying an upside of 17% from CMP.

Axis Direct

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