My two bits.
A lot depends upon your horizon. Is your investment horizon the next 6 months/one year or a multiyear hold?
Without doubt, it was fantastic to be holding Gruh as a stand alone company. Very well managed business, top parentage, clear horizon with many-many years of growth ahead, competitor intensity likely to reduce, past track record etc etc. It was difficult to find fault with the business. But since you are in the stock market, you have to be ready for surprises.
I know I may be accused of being fatalistic but being forced to become a shareholder of Bandhan Bank may not be such a bad outcome. Bandhan promoters are also considered clean with good corporate governance (Mr Ghosh is a humble man, is what I have read), amazing casa (41% of deposits), growing faster than Gruh (during the last Q, loans grew 46%, deposits grew 37% while operating profit before provisions grew 56%- ILFS type provisioning of Rs 385 cr will hopefully not be repeated; reasonable net npa at 0.7%). What gives confidence about the quality of promoters & their conservativeness is that they willingly took FULL provisioning of Rs 385 cr in the last quarter.
In my view, it will take a few quarters for things to settle down. The March 2019 quarter should again result in very strong pat growth for Bandhan (ILFS provisioning will be behind and last Q is generally a strong one). A few more quarters of solid growth will make investors forget the shock of the merger. Many disappointed Gruh investors would have sold off and the selling pressure would reduce. Frankly, Gruh should start growing faster under Bandhan will a new geography to do business in and lower cost of funds due to Bandhan’s casa deposits. The combined microfinance business of Bandhan and housing finance business of Gruh should hopefully turn out to be great combination.
Markets hate uncertainty. The way I look at it is that at times like these, one has to do a ‘Rip Van Winkle’, in the story where Rip Van slept off and woke up after many many years.
This too shall pass.