Bandhan Bank share price falls over 9% after MD & CEO resigns; Jefferies downgrades stock, cuts target
₹179.55 apiece on the BSE. The board of directors of Bandhan Bank on April 05 took on record the letter submitted by its Managing Director & Chief Executive Officer Chandra Shekhar Ghosh informing that he would retire from the services of the Bank as the MD & CEO upon completion of his current tenure on July 09, 2024. Ghosh has been serving as MD & CEO of Bandhan Bank since July 10, 2015.
Read here: Bandhan Bank CEO Chandra Shekhar Ghosh to step down when tenure ends in July Foreign brokerage Jefferies has downgraded its rating on Bandhan Bank to ‘Underperform’ from ‘Buy’ after its founder & CEO Ghosh resigned with effect from July 9 this year. Jefferies also slashed its target price on Bandhan Bank shares to ₹170 from ₹290 earlier, implying a potential downside of nearly 14% from Friday’s closing price. The brokerage believes the resignation of the founder-CEO is a negative surprise, saying that a smooth transition and succession is key for Bandhan Bank as most of the senior staff at the bank is new.
Bandhan Bank board had even approved a three-year reappointment and the application was awaiting approval from the Reserve Bank of India (RBI). Also Read: Voltas share price gained 10%, scaled 52-week highs on achieving record 2 million units AC sales during FY24 Jefferies said that any potential uncertainty may lead to slower growth and higher credit costs for the private lender. “Given the uncertainty, we are lowering our growth outlook and credit cost estimates for FY25-26, driving our EPS down by about 10-14%.
We also see valuations staying under overhang from such uncertainty," Jefferies said. Meanwhile, Bandhan Bank shares are in the F&O ban list for Monday’s trading session. This means that no fresh positions are
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