Shares of this NBFC stock under the ‘small-cap’ category jumped around 6 percent in Thursday’s trading session after a Foreign Institutional Investor, viz, Warburg Pincus, is likely to offload a stake in the company via Block Deal.
With a market capitalization of Rs 5,992.23 crores, the stocks of Fusion Micro Finance Limited started their trading session on Thursday at Rs 587.85 and currently trades at Rs 594, gaining approximately 6 percent as compared to the previous closing levels of Rs 561.20 apiece.
According to reports, Honey Rose Investment, one of the Promoter Group members and an associate company of global Private Equity (PE) firm ‘Warburg Pincus’, is likely to sell a 9.25 percent stake in Fusion Micro Finance Limited via Block Deal at a probable floor price of Rs 535 per equity share.
The floor price exhibits a discount of around 10 percent compared to the prevailing stock price level. Earlier this month, the PE firm sold a stake in IDFC First Bank, a private-sector Bank based in India.
Anand Rathi recently gave a ‘Buy’ call on the company’s stock with a target price of Rs 725 indicating a potential upside of around 22 percent. The Brokerage expects strong growth and improved collections during the second half of FY23-24.
During the recent financial quarters, the company has been successful in increasing its operating revenues as well as net profits marginally with the former moving up from Rs 531 crores during Q1FY23-24 to Rs 546 crores during Q2FY23-24, and, the latter, during the same period, shifting from Rs 120 crores to Rs 125 crores.
As per the recent presentations, the company reports an increase in assets under management (AUM) as well as disbursements of 24.60 percent and 14.71 percent respectively. Moreover, the company added 61 new branches under its network during Q2FY23-24.
Fusion Micro Finance Limited is engaged in micro-finance lending activities by way of providing financial services to poor women in India. The company uses its distribution channel to provide other financial products and services to the members related to providing loans for certain productivity-enhancing products, viz, mobile handsets, bicycles, etc.
Written by Amit Madnani
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