CreditAccess Grameen hits all-time high, surges 12% in two days

Shares of CreditAccess Grameen hit an all-time high of Rs 715, up 7 per cent on the BSE on Tuesday, surging 12 per cent in two days after the company finalised terms for Rs 214 crore non-convertible debentures (NCD) issue.

The company said the executive, borrowings and investment committee finalised the terms of issue of unlisted, unrated, senior secured, redeemable, transferable NCDs aggregating Rs 214 crore to Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N.V. (FMO) on preferential basis.

CreditAccess Grameen specialises in Micro and Small Enterprises financing. In the past three months, the stock has rallied 43 per cent, as compared to a 10 per cent rise in the S&P BSE Sensex.

In July-September quarter (Q2FY20), the company reported a healthy net interest income (NII) growth of 26 per cent at Rs 251 crore, driven by strong AUM growth of 36 per cent YoY. Net interest margin (NIM) declined to 12.1 per cent from 12.9 per cent in the year-ago quarter. Profit before tax (PBT) grew 11 per cent to Rs 127 crore on YoY basis.

“Management is focusing on declining its geographical skewness. It has already finished off 95 per cent of the expansion target of the year and has kept the branches and trained employee ready to encash upon opportunities in the 2HFY20,” analysts at Narnolia Financial Advisors said in the result update.

Margin has remained affected during the quarter; howver, the management has guided stability in the cost of borrowings which will lead to spread improvement going ahead. "Although the credit cost has spiked in the near term on the back of incessant rainfall, we remain optimistic of the trend line in the 2HFY20 on the back of strong Rabi crop expectation," the brokerage firm said. It has maintained ‘buy’ rating on the stock with the price target of Rs 749 per share.

At 12:44 pm, CreditAccess Grameen was quoting at Rs 682, up 2 per cent on the BSE, as compared to a 0.36 per cent decline in the S&P BSE Sensex. A combined 189,150 shares have changed hands on the counter on the NSE and BSE so far.

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