Ujjivan Financial Services – Attractive Valuation Key Positive: HDFC Securities Initiates Coverage


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HDFC Securities Retail Research

Ujjivan Financial Services Ltd. is a core holding company of Ujjivan Small Finance Bank Ltd. (holds 83.32% stake).

As a part of the banking license requirement, Ujjivan Financial Services has floated its wholly owned subsidiary which had commenced its banking operations from February 1, 2017. Ujjivan SFB is a mass market focused bank in India, catering to financially unserved and underserved segments and committed to building financial inclusion in the country.

We feel that the holding company discount will gradually narrow as the time passes because the company has already announced that it wants to reverse merge itself with Ujjivan SFB.

Ujjivan SFB is looking to raise Rs 600 crore of fresh capital from institutional investors to comply with the minimum public shareholding norms, post which the bank will approach the regulators for the merger scheme.

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