This recently listed small finance bank stock surges 20% on strong results

Jana Small Finance Bank stock update: The stock rallied to its highest level post listing after the bank reported significant improvement in NPAs.

Shares of Jana Small Finance Bank (SFB) surged 20 per cent to Rs 599 on the BSE in Tuesday's intra-day trade amid heavy volumes on improvement in asset quality with gross non-performing assets (GNPA) improving to 2 per cent at the end of March 2024 quarter (Q4FY24). GNPA stood at 3.6 per cent as on March 31, 2023 (Q4FY23). Net NPA improved to 0.5 per cent from 2.4 per cent in a year ago quarter.

Jana SFB stock was trading at its highest level since its stock market debut on February 14, 2024. Currently, it was quoting 43 per cent higher as against its issue price of Rs 414 per share. The stock has bounced back 62 per cent from its low of Rs 365 touched on the listing day.

The average trading volumes at the counter jumped over five-fold. Till 11:40 am; a combined 6.42 million equity shares changed hands on the NSE and BSE.

 

Meanwhile, Jana SFB reported highest-ever profit after tax (PAT) at Rs 670 crore, up 162 per cent year-on-year (YoY) for the financial year 2024 (FY24). Net interest income grew 28.1 per cent YoY at Rs 2,127 crore. Net interest margin improved to 8.0 per cent in FY24 as against 7.8 per cent in FY23. Loan asset under management (AUM) jumped 24.9 per cent YoY at Rs 24,746 crore. Total deposits increased 38 per cent YoY at Rs 22,571 crore.

The management guided 20 per cent growth in AUM and deposits. PAT growth in the range of 30 per cent to 40 per cent and ROE growth between 19 per cent and 21 per cent.

Jana SFB primarily offers deposit products (including demand, savings, and term deposits) and lending services, comprising both secured and unsecured loans. The primary secured loan products are secured business loans, micro loans against property (Micro LAP), MSME loans, affordable housing loans, term loans to NBFC, loans against fixed deposits, two-wheeler loans and gold loans.

The primary unsecured loan products are individual and micro business loans, agricultural and allied loans, and group loans (group loans are offered to a group of women as per the Joint Liability Group (JLG) model.

SFBs offer basic banking services such as payment, accepting deposits and lending to the unserved and the underserved segments of the Indian economy, including small businesses, marginal farmers, micro and small industries, and the unorganized sector.

SFBs are focused on serving the customers at the bottom of the pyramid to drive financial inclusion. The growth in the industry is illustrated by the exponential growth in both advances and deposits and is supported by the robust rural growth, new product offerings and associated crossselling opportunities, which will drive the SFBs’ market share to multi fold in the future, according to Fitch.