Shares of a microfinance institution appreciated 4.6 percent to reach an intraday high of ₹ 858.00 apiece on the National Stock Exchange (NSE) amid talks to acquire a stake. Its shares settled at ₹ 835.20 apiece on Tuesday.
Reportedly, Yes Bank was in talks with Kedaara Capital which was looking to sell off its stake in Spandana Sphoorty Financial.
Later, Yes Bank on Tuesday denied reports of acquiring a stake in the company. Issuing a clarification, the lender said that it was a strategic intent to augment business in the priority sector through organic and inorganic means. It added that the news about the acquisition was based on media/market speculations.
Spandana Sphoorty Financial is primarily engaged in the business of microfinance providing small-value unsecured loans to low-income customers in semi-urban and rural areas.
In another development, MoneyControl reported that the company’s promoter Padmaja Gangireddy sold 12.5 lakh equity shares or a 1.76 percent stake in the company at an average price of ₹ 830.15 per share.
The report added that Goldman Sachs Funds — Goldman Sachs India Equity Portfolio purchased 3.57 lakh shares and Goldman Sachs Collective Trust – Emerging Markets Equity ex-China Fund bought 4.68 lakh shares in the company. This is equivalent to a 1.16 percent stake in the company. These shares were bought at an average price of ₹ 830 per share, taking the transaction value to ₹ 68.54 crores.
With a market capitalization of ₹ 5,822 crores, Spandana Sphoorty Financial is a small-cap company. It has a very low return on equity of 0.40 percent. Its shares were trading at a price-to-earnings ratio (P/E) of 16.67, which is lower than the industry P/E of 24.92, indicating that the stock might be undervalued as compared to its peers.
Written by Simran Bafna
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