AU Small Finance Bank scrip tanks 13% on another top-level exit

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Shares of AU Small Finance Bank tanked as much as 13% to Rs 1,126.10 per share after CNBC-TV18 reported that the bank’s internal audit head Sumit Dhar has put in his papers. The bank has not yet intimated about the exit in an exchange filling at the time of filling the story. If the news are true it will the third exit from the bank since March 2021.

Earlier on March 3, 2021, Nitin Gupta the then Chief Audit Officer of AU Small Finance Bank had resigned. The second resignation came in on July 14 of Alok Gupta who was the Chief Risk Officer of the bank.

Earlier this month AU Small Finance Bank has received shareholders’ nod for raising equity and debt capital totalling up to Rs 14,500 crore to fund its business growth. The shareholders of the bank have passed the fund raise proposals at its annual general meeting (AGM) held on August 17, 2021, the bank said in regulatory filing on Wednesday.

Whereas for Q1FY22 the bank posted a 15% increase in its net profit to Rs 203 crore for the first quarter ended June 30. Net interest income jumped 40% to Rs 724 crore from Rs 516 crore.

On the asset quality front the bank’s Gross non-performing assets (NPAs) reduced sequentially to Rs 1,496 crore (4.3% of gross advances) from Rs 1,503 crore, it added.

The bank said it accelerated other provisions by 331% to Rs 177 crore during the quarter, to strengthen the balance sheet and be better prepared for any unforeseen adverse event. Restructured loans (standard) stood at Rs 1,265 crore as of June 30, 2021.

At the current price, the stock traded at 34.52 times its trailing 12-month earnings per share of Rs 37.49 per share and 6.45 times its price-to-book value, BSE data showed.

The stock had settled at Rs 1294.1 in the previous session. The stock quoted a 52-week high price of Rs 1389.0 and 52-week low of Rs 616.3, respectively. As per BSE data, total traded volume on the counter till 15:04PM (IST) stood at 4.90 lakh shares.