Update

I have added very small position to Bandhan Bank today around 172, its like 0.6-0.7% position size of folio on cost basis. Could scale up basis development going forward, but will not do so if there are better relative options with high risk reward asymmetry

Rational for addition:
It has pristine history (at least till now), NCGTC audit seemed like a big overhang to me. If proven then, have no idea of repercussions on Bandhan’s business but stock might nose dive and if bank comes out clean from audit then I think that’ s a positive (When is audit result due – God knows). If proven otherwise this could be next Yes bank (but I think highly unlikely given Founders pedigree and recent banking license with so many uncontrollable events in their concentrated region of WB, Assam)

Growth is there as MFI in itself is growing, my concern is their Corporate Book (did not dig deeper on CB)

Valuation wise seemed reasonable, not undervalued but lets say fairly valued given the historical and peer’s, but banking is a big blackhole so this could turn out to be 0 or 1 bet

And exit of Mr. Ghost could just be the short term hiccup as we are talking about an institution which will go on no matter what (Key man risk has already played out)

Reason for buy: Bottom fishing in current market with least efforts and of course anchoring bias, rationalizing away my bet with above points while reality seems different. If conviction builds up might switch Heranba position to Bandhan completely

That means new 25 lakh shares will come to the market, considering 70% promoter holding 17.5 lakh shares will be with promoter and around 7.5 lakh new shares free float with public [ 21 lakh old +7.5 lakh new].
Still liquidity is low…

Yes, arbitragers covered some path today. I think NCLT decision is on the horizon

At last. Ujjivan Financial Services arbitrage should get covered up as well. Hopefully upward path can continue in this highly undervalued script.

There is good news for the shareholders of UFS and USFB. Merger has been approved by NCLT.