Ujjivan Financial Services shares gain after Cinnamon Capital buys 4.9% stake

By: | Updated: August 31, 2017 11:16 AM

Ujjivan Financial Services Ltd shares rallied more than 3% this morning after Cinnamon Capital purchased 4.9% equity stake in the company.

Operation Clean Money, clean money, rbi, rbi annual report, rbi report, rbi report 2017, rbi on demonetisation, rbi demonetisation report, reserve bank of india, rbi demo, economy news, latest newsUjjivan Financial Services Ltd gained more than 3% in the morning trade after Cinnamon Capital bought a 4.9% stake in the company. (Source: IE image)

Ujjivan Financial Services Ltd shares gained more than 3% this morning after Cinnamon Capital purchased 4.9% equity stake in the company. The shares were trading at Rs 372 on NSE.

Yesterday, the UK government’s development finance institution CDC Group Plc reportedly sold nearly 4.9 per cent stake in Ujjivan Financial Services for more than Rs 212 crore, through an open market transaction. According to PTI reports, Cinnamon Capital purchased the stake. The shares were sold at Rs 360 a piece. Further, according to the bulk deal data available with NSE, CDC Group sold 59 lakh shares, amounting to 4.93 per cent stake of Ujjivan Financial Services.

The non-banking finance company Ujjivan Financial Services  informed exchanges on Tuesday that Ujjivan Small Finance Bank, the wholly owned subsidiary, has been included in the second schedule to the Reserve Bank of India Act, 1934. In a notification, the company said, “This grants the ‘Scheduled Bank’ status to Ujjivan Small Finance Bank’ from the date of notification.”

In an interview with CNBC TV18, Sudha Suresh, MD & CEO, Ujjivan Financial Services said, “With this scheduled bank status, we can issue certificate of deposits now but there is not much changes in terms of asset mix due to scheduled bank status.” According to her, change in liabilities would bring the cost of funds down.  She said, “With the facility of being able to mobilise deposits through banks and insurance companies as well as through mutual funds, what is going to happen is increasingly we could see a spate of increase in fixed deposits as well as CDs and typically these could come at varied costs. One can look at progressively reducing the cost to almost about 6.25 to 6.5 percent, anything sub-7 percent.”

The shares have returned 11.15% in the year so far, with bulk of the rally of more than 10% coming in the last one month. The BSE Small Cap index is up by more than 30% in the year.

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