‘The pain is behind us’, Ujjivan Small Finance Bank CEO says amid plans for ₹2,000-crore QIP

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Ujjivan Small Finance Bank Ltd. aims to raise ₹2,000 crore in core capital in the next two years to fund its five-year growth plans, as the lender looks to grow out of its “painful” past.

Ujjivan Small Finance Bank is awaiting a universal bank licence from the Reserve Bank of India.(Livemint)

“The pains are behind us, growth is around the corner for us,” CEO Sanjeev Nautiyal told reporters in Mumbai on Monday (8 September 2025). “We will be raising ₹2,000 crore in 18-24 months through the qualified institutional placement (QIP) route.”

These funds will be used to increase the number of Ujjivan SFB branches to 1,150 from 752 at present grow the loan book to ₹1 lakh crore by FY30 from ₹32,122 crore in FY25, he said. Deposits are also expected to increase three-fold to up to ₹1.2 lakh crore. At the same time, the lender aims to increase the share of low-cost current and savings bank account deposits to 35%, while maintaining the net interest margin at 6-7%.

Additionally, Ujjivan SFB is looking to venture into offering bank guarantees, forex and co-branded cards, Nautiyal said, without specifying timelines.

Mainstay Focus

According to the CEO, the stress in microfinance loans, which continues to remain a mainstay for Ujjivan SFB's loan book despite degrowth because of concerns around the sector, is headed towards normalisation now.

The stress levels have peaked in nine of the ten states, he said, adding that the microfinance industry will start showing growth in disbursements hereon.

As on 30 June 2025, Ujjivan SFB's capital adequacy ratio stood at 22.77%, including core buffers at 21.18%. As part of a five-year plan, it is targeting to maintain capital buffer at 17-20%.

Universal Bank Licence

Nautiyal is confident of winning a universal bank licence, an application for which is pending with banking regulator Reserve Bank of India, given Ujjivan SFB's “credibility and track record”.

There have been a series of exchanges with the regulator as part of the licence granting process, he said. A panel of relevant senior officials will look into the matter now, with a final call expected by the end of 2025.

It's worth noting here that Ujjivan SFB's larger rival, AU Small Finance Bank, was recently awarded a licence to transition into a universal bank within 18 months.

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