RBL Bank shares collapsed 20 percent to hit lower circuit on Monday as negative developments over the weekend and dull brokerage commentary counted on investor sentiment.
The stock hit its 52-week low of Rs 138 moment. It has been falling for the last two sessions and is down over 22 percent during the period RBL Bank’s Vishawvir Ahuja has stepped down as Managing Director and Chief Executive Officer of the bank, and the lender has appointed Rajeev Ahuja as the interim MD and CEO with immediate effect The Reserve Bank of India has also appointed its Chief General Manager Yogesh K Dayal as an fresh director on the board of RBL Bank CLSA said that the central bank appointing an fresh director to RBL Bank’s board is a surprise move and in the history, this action by the RBI has generally come when banks have been in trouble. This move will lead to query in the near term, said CLSA.
CLSA has trimmed its target price on the stock to Rs 200 from Rs 230 Meanwhile, ICICI Securities has downgraded its standing on the banking stock to’ vend’, considering the brewing query This interim adverse development can drag the bank’s valuation to as low as0.55 times FY23 book, the brokerage said, slashing its target price by about 28 percent to Rs 130 Investec has placed its recommendation for RBL Bank’under review’from’ buy’and will modernize post Q3 earnings. The recent development is easily a negative outgrowth from the investor confidence perspective, the brokerage said Bank hand unions’ marquee body AIBEA wrote a letter to Finance Minister Nirmala Sitharaman expressing concern that everything wasn’t right at RBL Bank and it was going the Yes Bank and Lakshmi Vilas Bank way.
We’re upset and concerned about the developments that are taking place in the affairs of RBL Bank Ltd, the Kolhapur- grounded private bank. The sequence of events leading to the unforeseen exit of Vishwavir Ahuja along with induction of Dayal from RBI on the board as an fresh member indicates that everything isn’t ok with the bank,” AIBEA said in its letter to the Finance Minister Still, Rajeev Ahuja said that”the recent developments aren’t on account of our fiscal performance. The bank has the support of the RBI Rumours about the bank’s fiscal health have been doing the rounds following Vishwawir Ahuja’s unforeseen exit Rajeev Ahuja declined to presume on the reason for former MD and CEO Vishwawir Ahuja’s exit and said that the RBI is comfortable with the performance of the bank. He said he didn’t see any issues for the bank’s stakeholders, “ now or latterly
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