Brokerage firm Jefferies downgraded Bandhan Bank Ltd’s rating to “underperform” from “buy” as the bank’s managing director and chief executive officer Chandra Shekhar Ghosh said that he will quit on the completion of his tenure in early July.
Jefferies’s target price for Bandhan Bank
Jefferies slashed the target price of the stock to ₹170 from ₹290, citing the founder-CEO’s resignation- a 14 percent downside from the stock’s closing price of ₹197.40 on April 5. In the past six months, Bandhan Bank’s shares have declined nearly 20 per cent.
What Jefferies said on Bandhan Bank’s stock?
Jefferies expressed concerns about the uncertainty related to the appointment of a new CEO. The brokerage also said that there should be a smooth succession process considering that most senior management members are relatively new to the bank.
Why Chandra Shekhar Ghosh resigned from Bandhan Bank?
Chandra Shekhar Ghosh will retire on July 9 this year and has over 30 years of experience in microfinance and development. In his resignation letter attached with the regulatory filing, he said he would retire from Bandhan Bank to take on a broader strategic role within the group.
He added, “After leading the Bank for almost a decade including three consecutive tenure as MD & CEO, I feel that the time has now come for me to assume a larger strategic role at Bandhan group level. Hence, I have decided to retire from the services of Bandhan Bank at the end of my current tenure as MD & CEO, i.e. on July 09, 2024.”
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