Nitin Chugh, Managing Director and CEO of Ujjivan Small Finance Bank, tendered his resignation, citing personal reasons
Shares of Ujjivan Small Finance Bank (SFB) hit a record low of Rs 22.25, down 8 per cent, on the BSE in intra-day trade on Friday following the resignation of Nitin Chugh from the position of Managing Director (MD) and CEO of the bank w.e.f. close of business hours on September 30, 2021, citing personal reasons.
The bank had made a stock market debut in December 2019. It hit a record high of Rs 63 on December 12, 2019. Ujjivan SFB had raised Rs 750 crore through an initial public offer (IPO) at a price of Rs 37 per share.
Meanwhile, shares of Ujjivan Financial Services too slipped 8 per cent to Rs 186.40 on the BSE. The stock of the holding company of Ujjivan SFB was trading close to its 52-week low price of Rs 184.75 touched on April 22, 2021.
“The Bank has received a letter dated August 18, 2021, from Mr Nitin Chugh, tendering his resignation from the position of Managing Director and CEO of the Bank w.e.f. close of business hours on September 30, 2021,” Ujjivan SFB said in an exchange filing.
The bank further said his tenure as Director is co-terminus with his tenure as Managing Director and CEO of the bank. Therefore, he shall cease to be a Director of the bank with effect from the aforesaid date. Consequently, he shall also cease to be Key Managerial Personnel of the bank in terms of Section 203 of the Companies Act, 2013, it said.
He has confirmed, in his resignation letter, that he is resigning due to personal reasons and there are no material reasons, the bank said.
Meanwhile, the bank added four directors to the board, out of which two are independent directors.
For the April-June quarter (Q1FY22), Ujjivan SFB had reported a higher-than-expected loss of Rs 230 crore due to elevated provisions. The overall recognised stress pool was 15.8 per cent (11.8 per cent in Q4) of the loan book (including GNPA at 9.8 per cent/restructured loans at 5.9 per cent), while the provision cover stood at Rs 1,150 crore (8.2 per cent of loans), including specific provisions.
Analysts at Emkay Global Financial Services believes that the bank’s long-term growth prospects hinge on the ramp-up of its liability pool and asset-side product diversification away from microfinance institutions (vulnerable to shocks such as Covid-19, waivers and natural calamities). These factors structurally weigh on margins, the brokerage firm said.
