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The Indian financial market witnessed a significant boost in investor sentiment as Bandhan Bank shares experienced a remarkable 9.5% surge, reaching an intra-day high of Rs 205.65. This surge was directly attributed to the Reserve Bank of India (RBI) granting its approval for Partha Pratim Sengupta to assume the role of Managing Director and Chief Executive Officer (MD & CEO) of the bank. The appointment, which is effective for a period of three years, is slated to commence no later than November 10, 2024. This announcement followed Sengupta's acceptance of the position on October 9th, 2024, and his subsequent confirmation the following day that he would relinquish all other commitments to comply with the terms and conditions of the appointment.
The news of Sengupta's appointment as the bank's leader comes at a time when Bandhan Bank is experiencing robust growth. The private lender reported a substantial 24.6% year-on-year (YoY) increase in its total business during the second quarter of the current fiscal year. This growth propelled its total business to a record high of Rs 2,73,163 crore, compared to Rs 2,19,712 crore in the corresponding period of the previous financial year. Further reinforcing the bank's financial strength, its loan and advance portfolio stood at Rs 1,30,652 crore, while deposits reached Rs 1.42 lakh crore during the quarter. The bank's collection efficiency ratio, a key indicator of financial stability, remained strong at 98.2% across all business verticals in the second quarter, slightly down from 98.7% in the preceding quarter.
The news of Sengupta's appointment and the bank's strong financial performance have spurred optimism among investors, leading to the significant share price increase. The stock has witnessed an 8.1% upswing in the past five trading sessions, reflecting the confidence of market participants in the bank's future under Sengupta's leadership. Over the past month, Bandhan Bank shares have yielded a 5.42% return, while the six-month return stands at approximately 13%. However, it is worth noting that the stock has experienced a 17% decline in investor wealth over the past year. This performance, while positive in recent months, highlights the volatile nature of the stock market and the need for a long-term investment perspective. In comparison, the benchmark Nifty 50 index, a broad indicator of the Indian stock market, has shown a slight decline of 0.5% in the past year. However, it has registered a positive return of 0.14% in the last month and a remarkable 11% growth in the past six months. The index has yielded a 26% return over the past year, demonstrating the broader market's resilience and growth potential.
Source: Bandhan Bank shares rise over 9% as RBI clears Partha Pratim Sengupta as CEO and MD