Shares of Ujjivan Financial Services (down 7 per cent at Rs 105) and Ujjivan Small Finance Bank (down 3 per cent at Rs 17.40) hit their respective 52-week lows on the BSE in Monday’s intra-day trade. These stocks have corrected 60 per cent and 55 per cent, respectively, from their 52-week highs level. In comparison, the S&P BSE Sensex was down 0.83 per cent at 57,353 points in the morning trade.

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Ujjivan SFB has applied to the regulators for a reverse merger and will be raising capital through a qualified institutional placement (QIP) of Rs 600 crore to meet the minimum shareholding norms for the coalition, leading to further RoE dilution.

“Though we believe management issues seem to be settled for now with the appointment of an internal candidate as MD & CEO, the bank will require transformational leadership to become a new-age universal bank. MFI dominance, weak asset quality, and sub-par liability/return profiles remain key concerns,” the brokerage firm said.