Bandhan Bank shares rose more than 7% in the morning session after the Reserve Bank of India (RBI) approved Partha Pratim Sengupta to become the new Managing Director and CEO of a private bank.
Partha Pratim Sengupta accepted the position on October 9, 2024, and indicated on October 10 that he would leave his previous positions in accordance with the RBI's terms and conditions. His three-year tenure is scheduled to begin on November 10, 2024.
The appointment will be confirmed after receiving approval from the bank's Nomination and Remuneration Committee.
At 9.30 a.m., Bandhan Bank shares were trading at Rs 200.8 per share, up 7 percent on the NSE from the previous session's closing price.
Bandhan Bank further reported that the National Credit Guarantee Trustee Company (NCGTC) had completed a rigorous forensic examination of its claims under the Credit Guarantee Fund for Micro Units (CGFMU) scheme. As of March 31, 2024, the total assessed payout stood at Rs 1,231.29 crore.
The bank had received Rs 916.61 crore in December 2022. According to Bandhan Bank, the final reimbursement as of March 2024 is Rs 314.68 crore, having settled the initial claim.
International brokerage Jefferies maintained its buy rating on Bandhan Bank, with a target price of Rs 240 per share, noting Partha Sengupta's appointment as Managing Director and CEO as a good move.
Sengupta's experience in West Bengal, a critical market for the bank, is expected to bolster its standing. Furthermore, the bank expects to earn Rs 320 crore from a CGFMU claim, with Rs 230 crore in recoveries, increasing its profitability and trustworthiness.
With historical strains alleviated and excellent prices of 1.1 times FY26 adjusted price-to-book, Jefferies advises that investors continue to buy the company.
International Brokerage Goldman Sachs also stated that the hiring of the MD and CEO, along with the resolution of the CGFMU claim, eliminates all near-term risks. The focus on Bandhan Bank now turns to its fundamentals, as investor concern has been addressed around the continuity of business momentum following the change in management
