1 week ago
DCB Bank Shares Rise on Report of PE Infusion Talks
DCB Bank shares went up after a report said private equity investors may put money into the bank.
The shares reached Rs 220 on the BSE.
Investors may buy up to 9.99% of a bank if the RBI approves it.
Several analysts currently recommend buying DCB Bank shares.
Their average 12-month target price suggests the shares could rise further.
Equirus said the bank is trying to reduce the extra interest it pays on some deposits.
The bank also wants to grow its business and profits by 18–20%.
Gold loans make up about one-fifth of its lending book.
DCB Bank shares rose 6.10% to reach Rs 220 on BSE.
A report said private equity investors were discussing a capital infusion into the bank.
Private equity investors can acquire up to 9.99% of a bank with RBI approval.
DCB Bank had nine Buy ratings and one Hold call in August.
Equirus said the bank is targeting 18–20% growth in its balance sheet and bottom line.
- Who
- DCB Bank, private equity investors, the Reserve Bank of India, and market analysts.
- What
- DCB Bank shares rose after a report about possible private equity capital-infusion talks.
- Where
- The share movement was reported on the BSE; DCB Bank’s assets are diversified across states, with Maharashtra its largest stated exposure.
- When
- The shares rose following the reported development; analyst recommendations cited in the article were issued in August.
- Why
- Investors reacted to the reported possibility of private equity funding and the bank’s growth and profitability outlook.
Key facts
- Share price move
- DCB Bank rose 6.10% to a high of Rs 220 on BSE.
- Reported development
- The bank was reported to be in talks with private equity players for a capital infusion.
- Permitted stake
- Private equity investors may acquire up to 9.99% in a bank with RBI approval.
- Analyst view
- DCB Bank received nine Buy recommendations and one Hold call in August.
- Consensus target
- The 12-month consensus target price was Rs 233.38, implying about 7% potential upside.
- Growth target
- Equirus said DCB Bank is targeting 18–20% growth in its balance sheet and bottom line.
- Gold-loan exposure
- Gold loans account for about 20% of the bank’s book, while co-lending stood at Rs 7,000 crore, mostly in gold loans.
Quotes
Equirus
Brokerage and financial-services firm that hosted DCB Bank at its India Growth Summit
“Bank has been focusing on core fee income Bank has been monitoring the employee base. Opex/ Assets has improved from 2.89 per cent to 2.42 per cent largely on account of improved staff productivity”
businesstoday.in
Sources
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