Private lender South Indian Bank’s share price plunged the most in two years after its managing director and Chief Executive Officer (CEO) Murali Ramakrishnan opted out of reappointment.
At 11:34 AM the shares of South Indian Bank were trading 14.20% lower at ₹ 14.20 apiece. However, the shares cracked as much as 16.92% on Wednesday’s early trades to reach an intraday low of ₹ 13.75 apiece as compared to its previous close of ₹ 16.55. Around 10.61 crore shares changed hands on the counter today, as compared to merely 23.44 lakh shares on Tuesday.
Ramakrishnan said that he will not apply for an extension of his tenure due to personal reasons after the completion of his current term on September 30, 2023.
The bank informed the exchanges that its board has considered and approved his request and that it will constitute a search committee to identify candidates for the positions of managing director and CEO.
South Indian Bank was a multibagger stock until today’s fall, as its share price increased from ₹ 7.60 apiece to ₹ 16.55. In other words, its share price increased by 117.76%. Therefore, if an investor would have invested in the stock one year ago, the value of their holdings would have been ₹ 2.17 lakhs as of Tuesday.
The South Indian Bank is a small-cap stock with a market capitalization of ₹ 3,463 crores. It has a low return on equity of 0.77%. The bank’s shares were trading at a price-to-earnings ratio (P/E) of 4.87, which is significantly lower as compared to the industry P/E of 8.80, indicating that the stock might be undervalued as compared to its peers.
Written by Simran Bafna
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