DCB Bank has agreed to divest its entire 9.65% equity stake in Saksham Gram Credit Private Limited, marking a strategic realignment of its microfinance-related assets. The bank will receive a total consideration of ₹9.55 crore for the sale of 17,49,991 shares held in the business correspondent entity. This transaction is structured as part of a broader consolidation where Purple Finance Limited plans to acquire Saksham Gram Credit as a 100% subsidiary, subject to regulatory and stakeholder approvals.

The consideration for the disinvestment is split between cash and equity. DCB Bank will receive ₹2.60 crore in immediate cash proceeds. The remaining balance of ₹6.95 crore will be settled through an investment in Purple Finance Limited, a BSE-listed Non-Banking Financial Company (NBFC). Under the terms of the agreement, DCB Bank will acquire 9,65,055 equity shares in Purple Finance at a price of ₹72 per share. These shares represent 1.02% of Purple Finance’s diluted paid-up capital.

Saksham Gram Credit, which began commercial operations in November 2020, operates as a Business Correspondent for banks and NBFCs across India. Its primary activities include providing micro-loans under the Joint Liability Group (JLG) model, individual enterprise loans for MSMEs, and credit-linked insurance on behalf of banking partners. The disinvestment allows DCB Bank to exit this specific operational model while retaining exposure to the sector through its new equity position in Purple Finance.

Purple Finance, registered with the Reserve Bank of India (RBI) as an Investment and Credit Company (NBFC-ICC), focuses on providing secured loans to micro and small enterprises for business expansion. The company has demonstrated significant asset growth, with its Assets Under Management (AUM) rising from ₹103 crore as of March 2025 to ₹249 crore as of March 2026. Following this transaction, DCB Bank’s total shareholding in Purple Finance will stand at 1.32% of the existing paid-up capital.

Transaction Details

The deal is expected to be completed within six months, contingent upon necessary corporate, regulatory, and legal approvals. The transaction was disclosed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Rubi Chaturvedi, Company Secretary and Compliance Officer at DCB Bank, signed the disclosure filed with the BSE and NSE on August 06, 2026.

Strategic Implications

The structure of this deal highlights a shift from direct operational involvement in micro-lending via business correspondents to a passive investment role in a larger NBFC platform. By swapping its stake in Saksham Gram Credit for shares in Purple Finance, DCB Bank retains exposure to the micro-enterprise lending segment without bearing the operational risks associated with managing a BC network. Purple Finance’s strong AUM growth trajectory—more than doubling from ₹103 crore to ₹249 crore in one year—suggests that the bank is positioning itself within a scaling asset-light NBFC model rather than exiting the sector entirely.

DCB Bank reported a record quarterly Profit After Tax (PAT) of ₹213.20 crore for Q1FY27, driven by a historic low in operational efficiency metrics and robust deposit growth. The bank achieved its highest-ever quarterly EPS of ₹6.62 and an ROE of 13.61%, meeting its time-bound guidance for the financial year. Managing Director & CEO Praveen Kutty attributed the performance to a strategy focused on stockpiling customer liabilities, improving productivity, and optimizing capital utilization amidst geopolitical uncertainties.

The Board of Directors approved the unaudited financial results at its meeting on July 24, 2026. Statutory auditors Varma & Varma and Deloitte Haskins & Sells reviewed the results pursuant to Regulation 33 and Regulation 52(4) read with Regulation 63 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The transcript of the earnings conference call was filed with BSE and NSE on July 30, 2026.

Financial Performance and Efficiency

Total income for the quarter reached ₹2,180.64 crore, comprising Net Interest Income (NII) of ₹684 crore and Non-Interest Income of ₹196.33 crore. While yield on advances declined by 23 basis points quarter-on-quarter to 10.75% due to a higher mix of lower-yielding gold loans, the bank offset this through significant cost reductions. Cost-to-average assets hit a historical low of 2.42%, down from 2.52% in Q1FY26, despite traditional salary increases in the first quarter. Employee count decreased to 11,554 from 11,896 two years ago, driving business per employee to an all-time high of ₹11.06 crore.

Asset Quality and Portfolio Strategy

Asset quality continued to improve, with Gross NPA (GNPA) declining to 2.43% from 2.98% year-on-year. Net NPA fell to 0.84%. Credit costs stood at 0.26% (26 bps). Management highlighted that non-gold slippages remained controlled at 1.52%. For gold loans, DCB Bank maintains a conservative Loan-to-Value (LTV) ratio of maximum 75%, despite RBI permitting up to 85%, to mitigate risk against price volatility. This conservative stance allowed the bank to grow its gold loan book significantly without facing margin calls, even as gold prices corrected from ₹17,000 per gram to ₹14,400 per gram during the quarter.

Segmental Outlook and Guidance

Mortgage disbursements grew 35% year-on-year to ₹1,500 crore, signaling potential acceleration in balance sheet growth for subsequent quarters. The bank expects mortgage yields to improve overall portfolio yields in Q2-Q4 FY27. Co-lending is capped at 15% of the book, with management targeting organic growth primarily. MSME growth remains a focus area, with expected improvements in current account traction and trade finance income anticipated in Q2 and Q3 FY27. The bank reaffirmed its guidance to maintain cost-to-average assets below 2.5%, GNPA below 2.5%, and ROE above 13.5% for FY27.

What the Numbers Show

The divergence between modest top-line growth (6.4%) and strong bottom-line expansion (35.6%) highlights successful operational leverage. The reduction in cost-to-average assets to 2.42% demonstrates that productivity gains are outpacing inflationary pressure on salaries. Furthermore, the conservative LTV policy on gold loans has insulated the bank from recent commodity price corrections, preserving asset quality while allowing volume growth. With Tier I capital rising to 14.90%, the bank is well-positioned to pursue further capital raising for expansion, having passed an enabling resolution for up to ₹2,000 crore at its AGM.