The market has been on a roll over the past one year, but Ujjivan Financial Services, the parent company of Ujjivan Small Finance Bank, has had a rather mediocre run. At its current price of Rs.395, it has gained just 8% against the 33% posted by the benchmark Sensex. A large part of the underperformance has been driven by the headwind that the micro finance institution is facing. The MFI, besides its niche presence in lending to self-employed individuals, also operates in the micro & small enterprises, and affordable housing segments.
Things turned awry post-demonetisation in November 2016. The move impacted Ujjivan, resulting in provisioning on stressed asset portfolio amounting