Stock Hits Intraday High of ₹491, Gains 12% in Friday’s Session
Shares of Jana Small Finance Bank Ltd. surged over 12% on March 8 after the Reserve Bank of India (RBI) granted the bank an Authorized Dealer Category-I (AD-I) license for forex operations. This regulatory approval will allow the bank to expand its foreign exchange business and cater to a broader customer base.
The stock rose as much as 12.22% to an intraday high of ₹491 per share on the NSE, marking a strong rally following the announcement.
RBI Approval Boosts Investor Sentiment
Jana Small Finance Bank, in an exchange filing on March 7, 2025, confirmed that the RBI had granted the AD-I license under Section 10 of the Foreign Exchange Management Act (FEMA), 1999.
This license allows the bank to:
- Expand its foreign exchange services and improve cross-border banking operations.
- Offer forex-related services to businesses and individuals, increasing revenue streams.
- Enhance its market position among small finance banks by providing diversified financial services.
Financial Performance: Mixed Earnings in Q3 FY25
Despite the stock rally, the bank’s latest financial results showed mixed performance, with a decline in net profit but growth in key lending metrics.
- Net Profit Decline: The bank reported a 17.8% year-on-year drop in net profit to ₹110.6 crore for Q3 FY25, compared to ₹134.6 crore in Q3 FY24.
- Net Interest Income (NII) Growth: NII increased 8.1% YoY to ₹593 crore from ₹548.5 crore in the year-ago period.
- Assets Under Management (AUM) Expansion: The bank’s AUM grew 19% YoY to ₹27,984 crore as of December 2024, with 68% of its assets being secured loans.
Market Outlook: Analysts Bullish on Growth Prospects
Market analysts view the RBI’s approval as a key milestone for Jana Small Finance Bank, positioning it to compete more effectively in the financial services sector.
Key reasons for optimism include:
- Diversification of revenue streams: The forex business will enhance fee-based income and reduce dependence on interest income.
- Growth in secured lending: The 68% secured asset base ensures stability in loan recovery and lower credit risk.
- Expansion opportunities: The AD-I license positions the bank for corporate and retail forex services, increasing customer acquisition potential.
Jana Small Finance Bank Strengthens Position in Financial Services
The 12% rally in Jana Small Finance Bank shares underscores investor confidence following the RBI’s approval for forex operations. While the bank’s net profit declined in Q3 FY25, the strong AUM growth and NII expansion signal resilience.
With the ability to provide enhanced foreign exchange services, Jana Small Finance Bank is expected to expand its market reach and drive long-term growth in India’s financial services sector.
