RBL Bank slips 20% in 4 days, nears new low ahead of Q4 business update

Analysts at JP Morgan have ‘underweight’ rating on RBL Bank
Shares of RBL Bank were trading lower for the fourth straight day, down 5 per cent at Rs 129.20 on the BSE on Wednesday ahead of the January-March quarter (Q4FY20) business update due later in the day. The stock of the private sector lender has lost 20 per cent in the past four trading days and it was trading close to its all-time low price of Rs 128.75 touched on March 24, 2020.

“In wake of the significantly higher level of market speculation around RBL Bank stock, please note that the Bank will be issuing a statement on certain key business parameters of the fourth quarter by tomorrow,” the bank said in an exchange filing on Tuesday after market hours.

In the past one month, the share price of RBL Bank has tanked 55 per cent despite management clarification last month that the bank is a well-capitalised and profitable entity. In comparison, the S&P BSE Sensex was down 24 per cent during the same period.

“Market rumours around financial health and stability of the bank are totally misplaced, motivated and not based on facts,” RBL Bank said in a statement on March 17. The lender had made second such statement in the last month.

“There has been no material adverse change in the asset quality since announcement of Q3 financial results on Jan 22, 2020 and guidance remains consistent. While there has been no material impact on bank’s retail deposits, there have been some withdrawals from institutional depositors and a couple of state government organizations constituting about 3 per cent of the bank’s total deposits in the last one week,” it added.

Analysts at JP Morgan have ‘underweight’ rating on RBL Bank on relatively high share of non-investment grade book, an unseasoned unsecured book and nascent deposit franchise. However, the stock trades well below the brokerage March 21 price target of Rs 170 per share.

At 01:52 pm, RBL Bank was trading 4 per cent lower at Rs 130, against 4.4 per cent decline in the S&P BSE Sensex. A combined 12.8 million shares changed hands on the counter on the NSE and BSE so far.

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