Strong Earnings Growth Boosts CreditAccess Grameen Shares


Shares of CreditAccess Grameen (CAG) surged 6% to Rs 982.25 on the BSE on Wednesday. The gains coincide with the Insurance Regulatory and Development Authority of India’s (Irdai) granting CAG a certificate of registration for its CreditAccess Life Insurance. CAG is India’s largest microfinance institution, which has a large market share in the world.

CAG recently announced that it achieved a three-fold success in March 2023, by completing Direct Assignment transactions amounting to Rs 936.63 crore and a PTC transaction of Rs 98.77 crore. In the fourth quarter of FY2023, the company was able to raise Rs 5,840.09 crore from term loans, NCDs, MLDs, ECBs, Direct assignments and PTCs.

CAG’s sustained market leadership and consistent performance across cycles has led analysts at ICICI Securities to give the company a BUY recommendation and a target price of Rs 1,100 per share. Analysts have also remarked on CAG’s ability to capture huge untapped opportunity in the microfinance space via deeper penetration in new and existing geographies and increasing customer base. In addition, the removal of interest caps is expected to raise the company’s NIMs.

CreditAccess Grameen Ltd (CAG) is one of India’s largest microfinance institutions. It was founded by Mr. V.G. Rajendran, who has over two decades of experience in the financial services industry. CAG serves over 4.8 million customers, with a presence in 19 out of 28 states in India and two Union Territories. The company also has pan-India presence across 216 districts. It has been rated ICRA’s AAA, which is a reflection of CAG’s sound financial position and adequate risk management practices.