Equitas Small Finance Bank reported gross advances of ₹50,694 crore for the quarter ended September 30, 2026, marking a 29.58% year-on-year increase. Total deposits rose 19.03% YoY to ₹52,483 crore, reflecting robust balance sheet expansion driven by strong disbursements.

The bank disclosed these provisional figures in a filing with the stock exchanges under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The growth in advances was supported by disbursements amounting to approximately ₹7,461 crore during the quarter, which represented a 38.66% YoY and 9.98% QoQ increase. Additionally, the bank sold non-performing assets (NPAs) worth ₹110 crore across Retail, Affordable Housing Finance (AHF), and Micro and Small Enterprises (MSE) segments to an Asset Reconstruction Company (ARC).

Advance composition and growth drivers

Gross advances include an IBPC/Securitised/Assigned portfolio of ₹3,171 crore as on September 30, 2026, compared to ₹2,126 crore as on June 30, 2026. The micro finance and micro loans segment saw significant traction, growing 86.65% YoY to ₹6,331 crore. This segment includes the purchase of agricultural assets from other regulated entities under Direct Assignment (DA). DA outstanding stood at ₹579 crore as of September 30, 2026, down from ₹837 crore in the previous quarter. Excluding this DA component, overall bank advances grew by 28.10% YoY and 7.08% QoQ.

Deposit mobilization and CASA trends

Total deposits expanded significantly, reaching ₹52,483 crore. However, the Current Account Savings Account (CASA) ratio declined from 31% in September 2025 to 26% in September 2026. Despite the lower ratio, absolute CASA balances remained stable at ₹13,480 crore, showing a marginal 1.04% YoY decrease but a 9.53% QoQ increase. The cost of funds stood at 7.12%, slightly higher than the 7.05% recorded in the previous quarter but lower than the 7.35% seen in September 2025.

Credit-Deposit ratio analysis

The Credit-Deposit (CD) ratio improved to 90.55% in Q3FY26 from 92.93% in Q2FY26, indicating better liquidity management relative to asset growth. On a year-on-year basis, the CD ratio increased from 84.09% in September 2025. After reducing refinance borrowings from advances, the adjusted CD ratio stood at 80.29%, down from 81.25% in the previous quarter but up from 78.52% a year earlier.

What the numbers show

A notable divergence exists between the rapid growth in gross advances (29.58% YoY) and the slower growth in total deposits (19.03% YoY). This gap has widened the CD ratio to 90.55%, suggesting that the bank is leveraging its existing deposit base more aggressively to fund loan book expansion. While the absolute CASA balance remains stable, the declining CASA ratio implies a reliance on term deposits or other funding sources, which may exert upward pressure on the cost of funds if this trend persists. The significant sale of NPAs (₹110 crore) alongside strong disbursements indicates a dual strategy of cleaning up the balance sheet while accelerating credit growth.

Equitas Small Finance Bank Limited has received listing approval for its ₹500 crore Lower Tier II Non-Convertible Debentures (NCDs). The securities, allotted on September 25, 2026, were listed on the BSE Limited on September 29, 2026.

The issuance comprises 50,000 rated, listed, unsecured, and subordinated bonds with a face value of ₹1 lakh each. These instruments are redeemable after ten years from the deemed date of allotment, maturing on September 25, 2036. The private placement strengthens the bank's capital base with long-term, subordinated debt carrying a fixed coupon of 9.95% per annum.

Instrument Structure and Terms

The debentures are classified as Lower Tier II Bonds, which qualify as Tier II capital for regulatory purposes. Key structural features include:

• Coupon Rate: Fixed at 9.95% per annum, payable annually.
• Tenure: 10 years from the date of allotment.
• Security: Unsecured, meaning no specific assets are pledged against the debt.
• Redemption: Bullet redemption at par (₹1 lakh per unit) plus accrued interest on maturity.

Credit Ratings and Interest Schedule

The bonds have received dual credit ratings with a stable outlook, reflecting strong investor confidence in the issuer's creditworthiness despite the unsecured nature of the instruments.

Interest payments are scheduled annually, with the first payment due on September 25, 2027. The record date for each interest payment falls 15 days prior to the due date. The principal amount is subject to full redemption upon maturity in 2036.

What the Numbers Show

The annual interest outflow for this tranche amounts to ₹49.75 crore (calculated as 9.95% of ₹500 crore), payable in equal installments of ₹9,950 per bondholder annually. The choice of a 10-year tenure aligns with the bank's need to match long-term asset liabilities while bolstering its Tier II capital adequacy ratio without diluting equity. The receipt of AA- ratings from both Care Ratings and India Ratings underscores the market's assessment of the bank's financial stability, facilitating the successful private placement without collateral requirements.