This Small Cap Small Finance Bank said in a filing dated 11 September 2023 that it has jointly filed for a merger with its Financial Services arm, which is also listed on both exchanges. The bank has a market cap of Rs. 9900 crore and the Financial Services Arm has a market cap of 6350 crore; both being part of the S&P BSE Small Cap Index.
In the aforementioned filing, Ujjivan Small Finance Bank Ltd and Ujjivan FInancial Services Ltd confirmed the filing of a joint application by the both companies with the Hon’ble National Company Law Tribunal, Bengaluru Bench (“NCLT”) in the matter of Scheme of Amalgamation of UFSL and Bank under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013.
Based on the joint application, on September 11, 2023, the order dated September 08, 2023 as pronounced by the Hon’ble NCLT.. Pursuant to the said Order, the Bank has been directed to convene a meeting of equity shareholders for consideration and approval of the proposed Scheme of Amalgamation on November 03, 2023, at 11:30 AM through Video Conferencing.
Currently, 74% of the Small Finance Bank is held by promoters while 11% by FIIs & DIIs and the rest by the retail public. Ujjivan Financial Services has no promoter holding, with 56% held by the public and 40% by FIIs, followed by 4% held by DIIs.
The shares of Ujjivan Small Finance Bank rose 2.2% and Ujjivan Financial Services’ shares rose 1.7% within the first 15 minutes of markets opening and is currently trading at Rs. 49.15 and Rs. 518.60 respectively. The financial services arm is a multibagger, returning 121% in a 1 year period while the Small Finance Bank has returned 94%.
In Q1 FY24, Ujjivan Small Finance Bank reported a top line NII growth of 32% YoY from Rs. 600 crore to Rs. 793 crore. Net Profits grew 60% YoY from Rs. 202 crore to Rs. 324 crore, indicating margin contraction of 40 bps. During the same period, Ujjivan Financial Services reported a top line growth of 37% YoY from Rs. 1,006 crore to Rs. 1,375 crore. Net Profits de-grew 11% YoY from Rs. 246 crore to Rs. 220 crore, indicating margin contraction of 190 bps.
Ujjivan Small Finance Bank, founded in 2017 provides various banking and financial services in India and comprises Treasury Operations,retail, Corporate and Other Banking Divisions. Ujjivan Financial Services on the other hand, operates as an NBFC and incorporated in 2005 that provides financial services to economically weaker sections in India.
Written by Sandeep R
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