KARUR VYASA BANK

Flash News Investment - - RECOMMENDATIONS -

{ { { Ticker: 590003 FV: ₹2 52-Week H/L: ₹126.53/73.85

We had rec­om­mended Karur Vyasa Bank in Vol­ume No 34, Is­sue No 42 (dated Aug 6, 2018), when the scrip was trad­ing at Rs 106. Our rec­om­men­da­tion was backed by fac­tors like good growth tra­jec­tory. Re­cently, the RBI im­posed a penalty of Rs 5 crore on the bank for non-com­pli­ance with its di­rec­tions on In­come Recog­ni­tion and As­set Clas­si­fi­ca­tion (IRAC) norms. The clar­i­fi­ca­tion from the bank is awaited. In Septem­ber, it rolled out a tab-based dig­i­tal ini­tia­tive to help el­i­gi­ble re­tail and busi­ness cus­tomers get in prin­ci­ple sanc­tions for their loans with min­i­mal time. Also, it has re­ceived ap­proval from the share­hold­ers to raise Rs 1,200 crore tier-I debt to meet cap­i­tal re­quire­ment. Con­sid­er­ing the volatil­ity in the bank­ing and NBFC sec­tors, we urge in­vestors to RE­DUCE EX­PO­SURE to the scrip.

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