Ujjivan Financial Services slips as RBI places restrictions on further purchases by FPIs

Ujjivan Financial Services fell 1.51% to Rs 385.20 at 11:31 IST on BSE after the Reserve Bank of India placed restrictions on further purchases of shares of the company by registered foreign portfolio investors.

Meanwhile, the BSE Sensex was down 367.98 points, or 1.38%, to 26,358.36.

On BSE, so far 6.10 lakh shares were traded in the counter, compared with an average volume of 14.29 shares in the past two weeks. The stock hit a high of Rs 391.15 and a low of Rs 372.35 so far during the day.

The Reserve Bank of India (RBI) yesterday, 15 June 2016, notified that the aggregate foreign shareholdings through foreign institutional investors (FII)/registered foreign portfolios investors (RFPIs)/foreign direct investment (FDI)/non-resident Indians (NRI)/American depository receipts (ADR)/global depository receipts (GDR)/persons of Indian origin (PIO) in Ujjivan Financial Services has crossed the permissible limit. Hence no further purchase of shares of this company would be allowed through stock exchanges in India on behalf of FII/RFPI/FDI/NRI/ADR/GDR/PIO.

Shares of Ujjivan Financial Services listed on the stock exchanges on 10 May 2016. The stock debuted at Rs 227, a premium of 8.10% to the initial public offer (IPO) price of Rs 210.

Ujjivan Financial Services reported net profit of Rs 122.30 crore on revenue from operations of Rs 713.20 crore for 9 months ended 31 December 2015. Net profit stood at Rs 75.78 crore on revenue from operations of Rs 599.31 crore for the year ended 31 March 2015.

Ujjivan Financial Services is transforming itself into a small finance bank (SFB). It is one amongst the 10 companies in India to receive in-principle approval from the RBI to set up a small finance bank. As per the regulatory requirements, the foreign shareholding in the company is to be brought down before it converts itself into a small finance bank. This is one of the reasons why existing foreign investors in the company are pruning their stake in Ujjivan Financial Services through the IPO.

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