Raksha Bandhan Special: Ujjivan and Equitas dubbed brother-sister shares! Know why

Raksha Bandhan Special: Today, on the auspicious occasion of Raksha Bandhan, Zee Business brings to its viewers a special show dedicated to mark this special event. We present two stocks which are identical in a lot of ways and it will not be an exaggeration to dub them as brother-sister sahers. We are referring to Ujjivan Financial Services and Equitas Holdings Ltd. Both these companies are from the same sector which is microfinance lending. Both these companies also have a Small Finance Banks licence.  

Focus of both these companies is microfinance lending and group lending. Even the Foreign Institutional Investors (FIIs) see the two companies at par with each other. While the FIIs hold around 24 per cent stake in Ujjivan Financial Services, their stake in Equitas Holdings is around 28 per cent.

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 The latter has a slightly greater exposure in vehicle finance, apart from the micro finance sector. 

Both these companies raise almost similar concerns on the loan moratorium front because of the ongoing coronavirus pandemic.  

The returns for these companies have also been negative over a one year period. While Ujjivan Financial Services has given 34 per cent negative returns, Equitas has given 54 per cent! The asset qualities for both these companies are similar.  

The results are also quite similar for both the companies especially in microfinance lending segment. It also appears that both these companies have almost similar exposures in identical geographies. 

The stock movement is also similar for both these stocks. Ujjivan Financial Services today ended the day at Rs 227.10, down by over 3 percent on the BSE while Equitas Holdings was also down by over 3 per cent ending the day at Rs 47.

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In a nutshell - they are like brother and sister.