Secondly, after the valuations accorded to the SBI Cards became apparent, the investors and traders have started viewing the stock of RBI more positively. That is because RBL has a very strong credit card business and that is not exactly factored into the valuations of the bank at this point of time. It is the combination of these two factors that boosted the price of RBL Bank from lower levels.
Actually, there were two triggers. Initially, the stock had corrected more than 70% from its peak price after its exposure to the Café Coffee Day group was disclosed by the management. This led to fears that the bank NPAs might be bigger than originally anticipated. However, the bank has managed to keep its NPAs in check apart from a few stray cases and exposures. That worked in favour of the bank.
Secondly, after the valuations accorded to the SBI Cards became apparent, the investors and traders have started viewing the stock of RBI more positively. That is because RBL has a very strong credit card business and that is not exactly factored into the valuations of the bank at this point of time. It is the combination of these two factors that boosted the price of RBL Bank from lower levels.