Bandhan Bank Shares Surge 7% on New CEO Appoint

Bandhan Bank shares saw a surge of over seven percent during the morning session after the Reserve Bank of India (RBI) approved Partha Pratim Sengupta as the new Managing Director and CEO of a private bank. Sengupta accepted the role on October 9, 2024, and confirmed on October 10 that he would be stepping down from his other roles in line with RBI’s requirements. His three-year term is expected to begin by November 10, 2024.

The appointment is still pending final approval from the bank’s Nomination and Remuneration Committee. At 9:30 am, Bandhan Bank’s shares were trading at Rs 200.8 on the NSE, up by 7 percent compared to the previous session’s close.

In addition, Bandhan Bank announced that the National Credit Guarantee Trustee Company (NCGTC) has completed a comprehensive forensic audit of its claims under the Credit Guarantee Fund for Micro Units (CGFMU) scheme. As of March 31, 2024, the total assessed payout amounts to Rs 1,231.29 crore.

The bank had previously received Rs 916.61 crore in December 2022 as part of an initial settlement. According to Bandhan Bank’s statement, the final payout remaining as of March 2024 stands at Rs 314.68 crore.

International brokerage Jefferies has maintained its “buy” recommendation for Bandhan Bank, setting a target price of Rs 240 per share. They view the appointment of Partha Sengupta as the new Managing Director and CEO as a positive step, particularly given his experience in West Bengal, a key market for the bank. This is expected to strengthen Bandhan Bank’s position.

In addition, the bank is poised to receive Rs 320 crore from a CGFMU claim, with Rs 230 crore in recoveries, which will enhance its profitability and credibility. Jefferies highlights that with past challenges resolved and attractive valuations at 1.1 times FY26 adjusted price-to-book, they recommend investors continue buying the stock.

Goldman Sachs also emphasized that the MD and CEO appointment, coupled with the resolution of the CGFMU claim, removes any near-term concerns. Their attention now shifts to the bank’s fundamentals, as investor uncertainty around business continuity following the management change has been addressed.