The bank has a relatively longer history of trading below the book value. But this was largely post 2018, during periods in which the bank had poor RoE/RoA and increasing NPA. Right now the RoE is about 13.8% , NPA is on a downward trajectory , the new book is at the moment shown as high quality assets.Even then the bank is traded below its adjusted book.
What could be the reason it is trading so? I assume the market knows something that I don’t know or Mr market is depressed and it is underpriced. Isn’t it at a far better position than it was in 2018 when there was a flood in Kerala and when the actual returns to shareholders as well as anticipated returns to shareholders were coming down to single digits? What do you think you know that I don’t know?
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