[ad_1]
Shares of AU Small Finance Bank hit a record high of Rs 1,441, gaining 4 per cent on the BSE in Tuesday’s intra-day in an otherwise subdued market after the private sector lender said the bank’s board will meet next week to consider bonus issue proposal. The stock surpassed its previous high of Rs 1,428 touched on April 13, 2022.
“A meeting of the board of directors of the Bank will be held on Monday, 25 th April, 2022 and will continue on Tuesday, 26th April, 2022 to consider the proposal for issuance of bonus shares, subject to requisite approvals,” AU Small Finance Bank said in an exchange filing.
The board will also consider the audited financial results of the Bank for the quarter and financial year ended on 31st March, 2022; and recommend dividend, if any, on equity shares for the financial year ended 31st March, 2022, the Bank said.
AU Small Finance Bank has outperformed the market by surging 24 per cent in the past one month, as compared to 1 per cent decline in the S&P BSE Sensex.
Last week, the rating agency CARE Ratings assigned a rating of CARE AA; Stable (Double A; Outlook: Stable) to the long-term debt instruments (Tier-II Bonds) of the Bank. The rating on short-term instruments (Certificate of Deposits) of the Bank has been reaffirmed at CARE Al+ (A One Plus).
The ratings assigned to the debt instruments of AU Small Finance Bank Limited factor in the continued momentum of growth in business and size, post-conversion into a small finance bank (SFB) in April 2017, the establishment of deposit franchise along with a sizeable Current Account Savings Account (CASA) deposits, and a moderately-diversified advances portfolio with a largely secured lending portfolio, CARE Ratings said in rationale.
As per the Reserve Bank of India (RBI) guidelines, AU Small Finance Bank will be eligible to apply to convert into a universal bank or after a review, RBI may increase its scope of activities after a satisfactory track record of five years of operating as a SFB.
However, the conversion would be subject to RBI approval. While the bank would benefit from conversion into a universal bank with the minimum threshold of lending to priority sector reducing from 75 per cent to 40 per cent, the bank’s asset strategy would largely continue in line with the current asset profile, and CARE Ratings does not expect the bank to have significant exposure to large-ticket corporate lending for the medium-term, even in case of conversion into a universal bank.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
[ad_2]
Source link