CreditAccess Grameen To Ujjivan: Microfinance Stocks Gain On New Regulations For Lending, Interest Rates

Shares of microfinance institutions advanced in trade on Tuesday after new rules and regulations on lending, and interest rates were announced for companies that come under the ambit.

Shares of CreditAccess Grameen Ltd. and Ujjivan Small Finance Bank Ltd. rose the most by over 4% each during trade, while Spandana Sphoorty Financial Ltd. and Muthoot Microfinance Ltd. stock pared gains after rising in trade on Tuesday. This compares to a 0.02% advance in the benchmark NSE Nifty 50 as of 11:40 a.m.

CreditAccess Grameen and Ujjivan Small Finance Bank rose as much as 4.2% and 4.4%, respectively during the day. CreditAccess Grameen has fallen by 42% in the last 12 months, while Ujjivan Small Finance has declined by 37% during the same period.

Of the 19 analysts tracking CreditAccess Grameen, 15 have a 'buy' rating on the stock, three suggest a 'hold' and one has a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 18.3%.

Thirteen of the 16 analysts tracking Ujjivan Small Finance Bank have a 'buy' rating on the stock, two suggest a 'hold' and one has a 'sell', according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 36%.