Merger buzz with Clix Capital gives wings to Suryoday SFB; stock zooms 20%

Illustration: Ajay Mohanty
Shares of Suryoday Small Finance Bank (SFB) were locked in the 20 per cent upper circuit band at Rs 179.40 on the BSE on Monday on report that Clix Capital Services is in merger talks with the lender.

Trading volumes on Suryoday SFB's counter jumped more than five-fold with a combined 1.17 million equity shares having changed hands on the NSE and BSE till 11:21 am. There were a combined pending buy orders for 245,316 shares on both the exchanges, the data shows.

According to a Business Standard report, Clix Capital Services, a digital-lending shadow bank, is in merger talks with Suryoday SFB. The non-banking financial company (NBFC) is run by former GE Capital boss Pramod Bhasin and former D E Shaw & Co managing director (MD) Anil Chawla.

 

According to sources, “the due diligence is already on for the proposed merger, which is in a fairly advanced stage. The deal is expected to be closed soon”. Centrum Capital is said to be the matchmaker, the report suggested. CLICK HERE FOR FULL REPORT

Suryoday SFB had made a weak stock market debut on March 26, 2021 and had listed at Rs 276.20, a 10 per cent discount over its issue price of Rs 305 per share on the BSE. Post listings, the stock hit a low of Rs 138.50 on August 23, 2021. The primary purpose of the initial public offering was to meet the Reserve Bank of India’s (RBI’s) listing requirement within three years of starting banking operations.

For April-June quarter (Q1FY22), Suryoday SFB had reported a loss of Rs 47.70 crore, compared to profit of Rs 26.6 crore in a year ago quarter. Net interest income (NII) during the quarter declined 1.7 per cent to Rs 123.5 crore compared to the corresponding quarter of the previous year.

While Suryoday’s capital ratio (Tier I around 50 per cent) was expected to be far higher than that of peers post the capital raise, its sub-par liability profile and micro finance institution (MFI)-dominant asset portfolio with rising risks due to regular asset quality shocks could put pressure on growth and return ratios in the near to medium term," analysts at Emkay Global Financial Services had said in IPO note.



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