The board of Equitas Small Finance Bank has approved the issuance of 50,000 rated, listed, unsecured, subordinated, transferable, redeemable, fully paid-up, lower tier II non-convertible debentures at its meeting held on September 16, 2026. These debentures will have a face value of ₹1 lakh each and an aggregate nominal value of up to ₹500 crore in a single series. The securities will be issued in dematerialized form and offered on a private placement basis to one or more prospective eligible investors. As per the latest regulatory filing, the NCDs are proposed to be listed on the BSE (formerly Bombay Stock Exchange), providing additional liquidity for investors. This capital raising initiative is strategically designed to bolster Tier II capital adequacy while protecting the bank's Tier I equity base, with the ₹500 crore debt placement categorized as Lower Tier-II Capital and targeted at providing leverage needed to sustain the bank's projected credit growth of around 20% under its long-term roadmap.
The board approval comes on the back of robust Q1FY27 financial performance, with Quarterly Net Interest Income surging 30.9% YoY to ₹1,029 crore compared to ₹786 crore in Q1FY26. The bank reported a net profit of ₹184 crore for Q1 FY27, compared with a loss of ₹224 crore in the same period last year and a profit of ₹213 crore in the quarter-ago period. As reported by The Economic Times, disbursements increased 93% YoY to ₹6,780 crore in Q1FY27, demonstrating strong business momentum. The bank's credit book recorded Q1FY27 disbursements growth of ~93% YoY to ₹6,780 crore, providing a solid foundation for the planned capital raising. This performance supports the bank's ongoing pivot toward high-yielding secured assets, which constitute the core of its loan book, while managing a calibrated reduction in its volatile microfinance portfolio. According to the company's quarterly earnings announcement, operating profit increased to ₹405 crore from ₹315 crore, aided by healthy core income growth and a sharp decline in provisioning.
The bank's asset quality showed improvement quarter-on-quarter, with gross non-performing assets (GNPA) declining to 2.36% in Q1 FY27, as against 2.49% in the preceding quarter. However, net NPA stood at 0.70%, compared with 0.68% in Q4 FY26. Following the board approval, Equitas Small Finance Bank shares advanced nearly 2% to hit an intraday high of ₹72.69 on the National Stock Exchange (NSE) on Wednesday, September 16, compared to Wednesday's closing price of ₹71.35. As per The Hindu BusinessLine, shares were trading at ₹72.19 per equity share, indicating continued investor confidence in the bank's strategic capital enhancement plans. The stock has fallen nearly 1% in the past week and 3% over the month, but on a year-to-date basis, it has soared 13%. While the shares hit a 52-week high of ₹83.90 per unit on July 15, 2026, they touched a year's low of ₹51.25 apiece on March 30, 2026. The bank's credit cost fell sharply to 1.37% from 6.48% a year earlier, while the provision coverage ratio remained stable at 71.02%.
Shareholders reappointed Mr. Vasudevan P N as Managing Director and Chief Executive Officer for a three-year term effective from July 23, 2026, with his remuneration also fixed by shareholders receiving 99.966% approval. His reappointment passed with 99.995% of votes in favor. Ms. Geeta Dutta Goel was reappointed as an Independent Director for a second consecutive term until December 26, 2029, with this special resolution securing 99.726% of votes. M/s. Sundaram & Srinivasan, Chartered Accountants, were appointed as one of the Joint Statutory Auditors until the conclusion of the 13th AGM in 2029, with their appointment and remuneration for FY27 both passing with 99.999% approval. Mr. Balaji Nuthalapadi was reappointed as Executive Director by rotation, with his remuneration also approved by shareholders.
Following the board approval announcement, Equitas Small Finance Bank shares traded over 1% higher at ₹72.20 apiece on Wednesday, compared to a 0.48% advance in the Nifty index, as per latest market data. The stock has demonstrated strong long-term performance, rising 14.48% year-to-date and 28.52% in the last 12 months, indicating sustained investor confidence in the bank's strategic initiatives and financial turnaround. The shares have shown resilience despite short-term volatility, maintaining their upward trajectory from the 52-week low of ₹51.25 reached on March 30, 2026, to current levels near the 52-week high of ₹83.90 achieved on July 15, 2026.
