The shares of Bandhan Bank gained 3.68% on Tuesday to reach an intraday high of ₹ 255.85 apiece on the Bombay Stock Exchange (BSE). This happened after the company informed the bourses that it has received the first tranche of money under the government’s Credit Guarantee Fund for Micro Units (CGFMU) amounting to Rs 916.61 crore.
The private sector lender’s shares were trading at ₹ 250.40 apiece on the BSE at 01:41 PM. JM Financial has a buy call on its shares with a target price of ₹ 325. This translates to an upside of 29.79% as compared to its share price.
Analysts at ICICI Securities suggested a target of ₹ 365.00 on the shares of Bandhan Bank, implying an upside of 45.76% as compared to its share price.
The Government of India set up the CGFMU to ensure payment against default in micro-loans extended to eligible borrowers by banks and other financial intermediaries. Its objective is to provide comfort to banks so that institutional credit is extended to micro and small enterprises, especially without any collateral and third-party guarantee.
Bandhan Bank will be receiving ₹ 2500 crores under this scheme. The next tranche of money is now due in the first quarter of the financial year 2024.
Written by Simran Bafna
