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AU Small Fin CEO sells shares to repay loan; Govt of Singapore, Sunil Mittal buyers

AU Small Fin CEO sells shares to repay loan; Govt of Singapore, Sunil Mittal buyers

AU Small Fin CEO sells shares to repay loan; Govt of Singapore, Sunil Mittal buyers
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By Nimesh Shah   | Abhishek Kothari  May 19, 2020 11:57:43 AM IST (Published)

Sunil Mittal’s Bharti SBM Holdings bought 24 lakh shares, the Government of Singapore bought 19 lakh shares and Monetary Authority of Singapore bought 5.3 lakh shares.

Bharti Airtel promoter Sunil Mittal, Government of Singapore and the Monetary Authority of Singapore have bought the bulk of the 52.2 lakh shares of AU Small Finance Bank sold by its CEO Sanjay Agarwal between May 15 and May 18.

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On Monday, Agarwal had informed the stock exchanges about the sale of shares, saying it was done “to fully repay my and my family’s loan against shares amounting to Rs 165 crore approximately and towards my COVID-19 related personal commitments which I had already expressed.”
All three investors bought the shares at Rs 414 apiece. At 11:44 AM today, the stock was quoting at Rs 400, up 0.77 percent over its previous close on the NSE.
Mittal’s Bharti SBM Holdings bought 24 lakh shares, the Government of Singapore bought 19 lakh shares and Monetary Authority of Singapore bought 5.3 lakh shares.
Incidentally, the Government of Singapore is also one of the big investors in Mittal’s flagship Airtel.
Sources at the Bharti Airtel Group said Sunil Mittal has made the purchases through his family office and that it was a personal investment.
The stock price is down nearly 50 percent since the beginning of 2020.
AU Small Finance posted a decent set of numbers for the March quarter, with net interest income rising 43.4 percent year-on-year and net profit rising 3.5 percent.
“While scaled-down economic activities and its impact on customer behaviour is likely to increase credit cost in FY21E, AU’s loan portfolio (around 99 percent secured), which is largely towards income generation loans (even in vehicle portfolio), would place the bank in a better position to achieve normalcy faster than peers,” said a note by ICICI Securities.
“While the ongoing lockdown is likely to impact near-term growth and asset quality, AU’s diversified loan mix, the strategic shift towards used vehicle financing, visible levers for margin expansion and experienced management team would help it achieve normalcy faster than peers,” the note said.
ICICI Securities has a buy rating on the stock with a target price of Rs 665.
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