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Informist, Friday, Feb. 21, 2025

By Alina Geogy

MUMBAI – Traders placed bullish bets on the derivatives segment of Bandhan Bank on Friday, in tandem with a rise in shares of the private lender. CLSA upgraded the stock to 'high conviction outperform' from 'outperform' with a target price of INR 220, which implies an upside of 61% from the previous close, according to media reports. CLSA shared a positive outlook for the bank citing its gradual migration to secured loans and outperformance among peers.

Several banks engaged in microfinance sector had been struggling with deterioration in asset quality over the past few months. However, CLSA expects the Indian microfinance space to improve to normal levels by the September quarter of 2025-26 (Apr-Mar), according to an ET Now report. There are early signs of improvement in collection efficiency, CLSA said. "If this is sustained, it should result in improvement in slippage with a quarter lag," CLSA said, according to media reports. Bandhan Bank is well placed to benefit from this recovery, the brokerage said.

Following the positive outlook by CLSA, shares of Bandhan Bank rose as much as 4.8% to an intraday high of INR 143 before settling at INR 139.38, up 2.1%. The trade volume surged to a two-month high of 18.6 million shares on the NSE Friday, which is thrice the volume of 5.6 million shares traded Thursday.

Traders added long positions to most call options of Bandhan Bank with highest change in open interest addition at the INR 145 strike price, which is 4% higher than the closing price. Open interest at this strike rose 51.5% to 2.3 million. Traders also covered short positions in some call options. On the other hand, the maximium change in open interest addition on the put side was at the INR 137.50 strike, which is 1.4% lower than the closing price. Traders covered short positions in the February futures contract of Bandhan Bank, with open interest falling 4.7% to 71.38 million.

Traders added short positions to the February futures contract of Nifty 50 expiring Thursday. The contract closed at a premium of 3.70 points to the spot index, with open interest rising over 3% to 16.91 million, according to provisional data. The benchmark Nifty 50 closed lower for the fourth day in a row and also for the second consecutive week. Friday, the index ended at 22795.90 points, down 0.5%.

--Nifty 50 Feb closed at 22799.60, down 142.90 points; 3.70-point premium to spot index
--Nifty 50 Mar closed at 22932.45, down 150.90 points; 136.55-point premium to spot index
--Nifty 50 Apr closed at 23085.00, down 141.45 points; 289.10-point premium to spot index

HDFC Bank, Axis Bank, ICICI Bank, Reliance Industries, State Bank of India, Mahindra & Mahindra, Kotak Mahindra Bank, Bharti Airtel, Tata Consultancy Services, Bajaj Finance, BSE, Larsen & Toubro, Infosys, and Tata Motors were the most actively traded underlying stocks Friday.  End

Edited by Deepshikha Bhardwaj

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