Ujjivan Small Finance Bank is planning to mop up Rs 2,000 crore through a qualified institutional placement (QIP) in the next 18-24 months, Sanjeev Nautiyal, managing director and chief executive officer, said on Monday.
The capital adequacy ratio stood at 23.1% for FY25, much above the 15% regulatory threshold, supported primarily by a strong Tier-I capital base.
Nautiyal said the fundraise is “agnostic” to the developments expected by the bank in terms of receiving the universal banking licence. The Reserve Bank of India had asked for additional information, and the decision on the licence is likely by December. The SFB had applied for the licence in the first week of February.
Growth Ambitions and Loan Book Targets
Nautiyal laid down the path for the next five years and said the microlender-turned-SFB aims to touch a gross loan book of Rs 1 lakh crore by 2029-2030. As on June 30, the gross loan book stood at Rs 33,287 crore.
“We expect the annual gross loan book to grow in the range of 20-25%, with the objective of achieving an ROE of 16-18% and ROA of 1.8-2.0% in FY30,” he said.
Deposit Growth and Branch Expansion
After converting into a small finance bank from a microfinance institution in FY17, the bank has been making efforts to increase its secured book and aims to raise its share to nearly 65-70%, Nautiyal said. It will be led by the growth in affordable housing, micro mortgages, MSME lending, vehicle finance, gold loans and agriculture loans. Currently, the bank’s secured book is at 46%. The lender plans to expand the portfolio by adding products in the mid-corporate lending.
In terms of deposit mobilisation, Ujjivan will focus on branch expansion and grow its current account and savings account deposits. Currently, the bank has 752 branches and plans to add 400 branches in the next five years. For FY26, the bank aims to grow advances and deposits at 20% while maintaining a credit-deposit ratio of 88%.
Nautiyal expects the net interest margin (NIM) to be in the range of 6-7%. In April-June, the NIM was 7.7%, down 60 bps quarter-on-quarter.
Shares of Ujjivan Small Finance Bank on Monday closed up 3.7% at Rs 44.15 on the NSE.