L&T Finance, a retail lending NBFC, saw its shares gain 5% in today’s intraday trade to hit a new 52-week high of ₹179.25 apiece. This uptick in shares came after 8.82 crore shares, or 4.04% of the total equity of the company, changed hands in a block deal window today, according to a CNBC-TV18 report.
The buyers and sellers involved in the block deal were not immediately disclosed. Earlier reports from CNBC-TV18 indicated that Bain Capital, along with BNP Paribas Financial SNC, was expected to exit L&T Finance through this transaction.
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Bain Capital’s affiliates BC Asia Investment VI and BC Asia Growth Investment were reportedly looking to divest their 3.54% stake at a floor price of ₹169.17 per share, representing a slight discount from the previous day’s closing price. The deal has a base price valuation of ₹1,500 crore, sources close to the development told CNBC-TV18.
Meanwhile, domestic brokerage firm Antique Stock Broking recently initiated coverage on the stock with a ‘buy’ rating and set a target price of ₹220 per share. The brokerage highlighted the company’s robust presence and established niche product offerings in both urban and rural financing sectors.
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According to the brokerage, the new MD & CEO, Sudipta Roy, is leveraging retail and fintech expertise to strengthen the team, enhance product and geographic diversification, and bolster risk management strategies through the integration of alternative data and technology partnerships.
This strategic approach positions the company well for scalability and sustainability.
Antique Stock Broking forecasts a 25% earnings CAGR and expects the return on equity (RoE) to increase by more than 400 basis points to 15% over the next three years.
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The brokerage expressed confidence in the company achieving these targets, noting that the resolution of security receipts and unwinding of residual corporate loans could potentially boost Return on Assets (ROA) by 80–100 basis points over the next three to four years, mitigating any pressure on the core business.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 13 Jun 2024, 11:34 AM IST
