AU Small Finance Bank is a mid sized micro finance NBFC carved out into a Bank. The transition from NBFC to Bank has been smooth and the past track record of the company is impressive. Focus on vehicle finance and micro / retail lending has proven to be safe and profitable for the company. Presence in semi urban and rural areas is the company’s edge and offers immense scope for expansion. The global pandemic has increased NPAs, but given strong pre-provisioning profits and stake sale in associate company, large part of the NPAs have been provided for or will be reversed. Despite positives, we have a neutral weight rating due recent spike in NPAs – 03-05-2021 Price: 923.85 Rating: Neutral Weight Recommendation: Hold
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