RBI had granted an in-principle approval to AU Small Finance Bank for conversion into a universal bank, earlier this year.
Jana Small Finance Bank reported a 40% YoY drop in net profit to Rs 102 crore in Q1 FY26.
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Jana Small Finance Bank share price: The shares of the lender opened at Rs 549 apiece, the highest level seen by the stock in nearly 8 months.
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The application was made under the regulatory framework outlined in the RBI’s “On Tap” licensing guidelines for small finance banks issued on December 5, 2019, and the latest circular on voluntary transition to universal banks released by the RBI on April 26, 2024
Stocks to watch, 30 Apr: Stocks like Bajaj Finserv, Bharat Petroleum Corporation, Jana Small Finance Bank, UTI Asset Management Company, Star Health, Ceat, Shoppers Stop, CIE Automotive India, Praj Industries, Indostar Capital Finance, Fedbank Financial Services, and State Bank of India will be in focus on April 30.
Stocks to Watch, 2 Apr: Stocks like Hi-Tech Pipes, Syngene International, Tata Steel, Biocon, Vaibhav Global, Tata Consumer Products, MOIL, JSW Energy, Quess Corp, Indian Bank, Pidilite Industries, Jana Small Finance Bank, SJVN, Power Grid Corporation of India, Shriram Finance, Polycab India, and Godawari Power & Ispat will be in focus on April 2.
As many as 3–4 small finance banks may be required to raise capital in the next 6–12 months owing to asset quality issues plaguing the micro lenders, sources familiar with the development have said.
In the October-December quarter, Jana Small Finance Bank has made an accelerated provision of Rs 93 crore, higher than Rs 61 crore a quarter ago.
The stock had delivered negative monthly returns consistently from July 2024 to December 2024.
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Ventura Securities is bullish on Jana Small Finance Bank has recommended buy rating on the stock with a target price of Rs 753 in its research report dated october 03, 2024.
In Q2FY25, the company's net profit dropped 21 percent YoY to Rs 96 crore
PNB Housing Finance, Shriram Properties, Paytm, Jana Small Finance Banks, Zomato are among the top stock picks for Samvat 2081 from Systematix Shares and Stocks (India).
Investec stated that Jana SFB's asset reconstruction company (ARC)-led strategy helped keep bad loans under control.
The bank, said Ajay Kanwal, MD and CEO, had crafted a plan for a reverse merger earlier but now the bank has no plans for a reverse merger. In the first reporting quarter of this fiscal, the bank reported a 89 percent jump to Rs 171 crore.
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Given the huge demand-supply gap, SFBs offer multi-fold growth opportunities
Rising secured loan share and lower cost of funds will drive return ratios
The bank’s net interest margin increased 20 basis points, Kanwal said, despite the cost of funds rising as well, offset in part by the housing loans portfolio.
Ajay Kanwal of Jana Small Finance Bank stated that the lender misses out on just one criteria set by the RBI for small finance lenders wanting to transition to universal banks.
The bank meets all the criteria except for one, to have a GNPA under 3 percent and NNPA under 1 percent for two financial years.
The net interest margin (NIM) of the bank improved to 8 percent in FY24 as against 7.8 percent in FY23.
The market turned volatile at 22,500 as it priced in the non-event. Once the index closes above 22,600, one can expect a march towards 22,700-22,800.