Ujjivan Small Finance Bank shares – The shares of Ujjivan Small Finance Bank were down over 6 per cent on the BSE and NSE on Monday around 1:30 pm. The shares were trading at Rs 18.50 on the BSE and Rs 18.40 on the BSE. What should investors do with this stock? Nilesh Jain Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking has the answers. 

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Jain said that the existing investors must exit this stock as the prospects do not look good. The right levels to exit the stock is between Rs 20 and Rs 22, he added. Jain said that he will not be surprised if the stock hits the target of Rs 10. 

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The stock fell almost 20 per cent on Friday on the NSE to Rs 19.70 from the levels of Rs 24.25 on 18 August. The stock has fallen on 6 occasions out of the last 7 trading sessions and on 13 occasions in this month, including today.  

This technical analyst recommends a strict “NO” on this stock saying that there is very little left in it.  

The trigger for its sharp Friday decline was the stepping down of Nitin Chugh from the post of Managing Director (MD) and Chief Executive Officer (CEO). 

While the founder of Ujjivan Small Finance Bank Samit Ghosh in his investor call has announced change in its top management, Jain said that the news has not positively impacted the share price. He said that if any material impact from the change in management was there it would have been reflected in the share price.  

He said that his views are purely on the basis of technical analysis and not on the fundamentals of the company. 

On the intraday basis, the shares of Ujjivan Small Finance Bank hit a low of RS 17.80 while a high of Rs 19.80 on the NSE.  His advice to investors is to not take any fresh long positions or positional trade for now. The structure of this stock on the technical charts does not look promising, he further said. 

Ghosh, in the investor call on 20 August had highlighted issues related to provisioning and high attrition rate in the company across the board. 

He had said that the provisioning was up and down since the first quarter of previous financial year. “Frankly, out tradition has been to recognise problems upfront, be transparent… take proactive steps immediately,” Ghosh said. “…those kinds of things we will strengthen,” he added.  

He also acknowledged that Ujjivan was going through “a very difficult time”.  

On the issue of attrition in the company, he said that there was a lot of attrition across the board over the last few months at various levels be it branch level, field level or middle management level. “We will try to stop that immediately,” he had said.