Money doubled in 2 years of IPO: Buy this mid-cap bank stock and earn up to 25%

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Published: May 1, 2018 11:56:14 AM

We bring to you one such mid-cap NBFC stock that has doubled the money in just two years of IPO to buy and earn up to 25%. According to HDFC Securities, the management of the company has guided that it will maintain focus on microlending while expanding further into SME and housing finance.

Photo for representational purposes only. (Image: Reuters)

Indian stock markets have grown quite well in the last two years with many stocks from large-cap to small-cap category vastly outperforming the key equity indices Sensex and Nifty. Over the course of last two years, BSE Sensex has risen more than 35% while the underlying components such as Maruti Suzuki, Reliance Industries and Yes Bank have more than doubled the investors’ money.

We bring to you one such mid-cap NBFC stock that has doubled the money in just two years of IPO to buy and earn up to 25%. According to HDFC Securities, the management of the company has guided that it will maintain focus on microlending while expanding further into SME and housing finance.

Shares of Ujjivan Financial Services Ltd have nearly doubled the investors’ wealth in the last two years of its IPO (initial public offering). The stock of Ujjivan Financial Services Ltd has advanced over 95% to Rs 410 from the issue price of Rs 210 in the last two years. Ujjivan Financial Services Ltd marked a decent stock market debut post completing its Rs 887 crore initial share sale. The IPO of Ujjivan Financial Services Ltd was subscribed about 40 times in the three-day bidding process.

The research and brokerage firm HDFC Securities has given a buy rating to the stock of Ujjivan Financial Services Ltd with a target price of Rs 508 which implies an upside of 24% from the current market price of Rs 410. “Ujjivan Financial Services Ltd is currently trading at P/ABV of 2.5x of FY19E and 2.2x of FY20E which we believe has room for significant upside potential. We recommend Ujjivan Financial Services Ltd as a ‘buy’ in the range of Rs 408 to 280 for successive targets of Rs 458 (P/ABV 2.5x FY20E) and 508 (P/ABV 2.8x FY20E),” HDFC Securities said in a research report.

Further, HDFC Securities has pointed out that huge industry opportunities within the BFSI sector, change of borrowing mix for superior margin, strong business growth in new segments, conversion of the branch into bank branch will be key upside triggers for Ujjivan Financial Services Ltd.

Disclaimer: Views and recommendations given in this section are the brokerage firms’ own and do not represent those of www.financialexpress.com. Please consult your financial adviser before taking any position in the stock mentioned.

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