Ujjivan Small Finance Bank has scheduled an Extra-Ordinary General Meeting (EGM) for November 13, 2026, to seek approval for a preferential issue of equity shares aggregating up to ₹409.04 crore. The capital infusion aims to bolster the bank's capital adequacy and support its strategic growth ambitions.

The proposed issue involves the allotment of up to 6,31,91,619 equity shares at a price of ₹64.73 per share, including a premium of ₹54.73. The allottees include International Finance Corporation (IFC), Bajaj Life Insurance Limited, Aditya Birla Sun Life Insurance Company Limited, and HDFC Life Insurance Company Limited.

Allottee Details

The preferential issue is structured as a private placement to qualified institutional buyers (QIBs). IFC, which currently holds 3.18% of the bank's equity, will emerge as the largest subscriber among the proposed allottees.

Growth Trajectory and Capital Needs

The bank reported robust expansion in its loan book over the last three fiscal years. Gross loans grew from ₹24,085 crore in FY23 to ₹40,655 crore in FY26, reflecting a compound annual growth rate (CAGR) of 19%. As of September 30, 2026, the gross loan book stood at ₹45,699 crore. This growth was driven by a strategic shift toward secured loans, which expanded at a CAGR of 45.2%, rising from ₹6,555 crore in FY23 to ₹20,079 crore by March 2026.

Deposits also witnessed significant traction, growing from ₹25,538 crore in FY23 to ₹45,668 crore in FY26 at a CAGR of 21.4%. By September 30, 2026, total deposits crossed the ₹50,000 crore milestone, reaching ₹50,643 crore. The Current Account Savings Account (CASA) ratio improved from 26.4% to 28.6% during this period.

What the Numbers Show

A key observation from the filing is the divergence between the bank's rapid asset growth and its reliance on external capital despite previous self-funding claims. The explanatory statement notes that since the last Qualified Institutional Placement (QIP) in FY23, the bank had funded its expansion entirely through internal accruals and retained earnings. However, the decision to raise ₹409 crore now suggests that internal accruals are no longer sufficient to support the current pace of loan book expansion, particularly as secured loans—which carry different capital weightages—now constitute 52.1% of the portfolio as of September 30, 2026. This shift in asset mix likely necessitates higher regulatory capital buffers than the unsecured microfinance portfolio previously held.

Voting and Procedural Details

Shareholders can cast their votes through remote e-voting starting November 10, 2026, at 9:00 am, ending on November 12, 2026, at 5:00 pm. The cut-off date for determining eligible members is November 6, 2026. The EGM will be held via video conferencing and other audio-visual means. KFin Technologies Limited has been engaged as the Registrar and Transfer Agent to provide the e-voting facility.

The price of ₹64.73 was determined in accordance with SEBI (ICDR) Regulations, 2018, based on a valuation report by JBPR Valuation Advisory LLP. The relevant date for price determination is October 14, 2026. The allotment must be completed within 15 days of receiving all necessary regulatory approvals.

Ujjivan Small Finance Bank reported a Q2 return on assets (ROA) of 2.4%, an improvement from 2.2% in the previous quarter. The bank maintained its FY27 guidance for asset quality at 2.0-2.2%.

Fresh slippages increased to ₹3.5 billion in Q2, compared to ₹1.7 billion in the prior quarter. This rise in slippages occurred alongside stable overall asset quality metrics.

Financial performance overview

The bank’s revenue grew 28% year-on-year to ₹21.5 billion, up from ₹16.8 billion in the corresponding period last year. Asset quality metrics remained largely stable despite the increase in fresh slippages.

What the numbers show

The data indicates simultaneous top-line expansion and stability in credit risk ratios, though with increased churn. While revenue grew significantly by 28% on a year-on-year basis, the bank managed to keep its GNPA ratio below 2.2%. The slight contraction in both GNPA and NNPA ratios suggests that new loan growth is not compromising aggregate asset quality, with provisions effectively covering potential losses as indicated by the low NNPA figure of 0.31%.

However, the doubling of fresh slippages to ₹3.5 billion from ₹1.7 billion quarter-on-quarter contrasts with the marginal improvement in headline NPA ratios. This divergence suggests that while recoveries or write-offs may have kept the stock of NPAs stable, the flow of new bad loans has accelerated. The bank’s reaffirmed FY27 guidance of 2.0-2.2% implies confidence that this elevated slippage rate is temporary or manageable within the projected asset quality band.