AU Small Finance Bank has completed the allotment of 2,22,762 equity shares on January 14, 2026, following the exercise of employee stock options under multiple Employee Stock Option Plans (ESOPs). The shares, each carrying a face value of ₹10.00, were issued in compliance with applicable regulations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ESOP Scheme-wise Share Distribution

The allotment encompasses shares from five different ESOP schemes implemented by the bank over the years. The distribution reflects the bank's continued commitment to employee participation through equity ownership.

The ESOP 2020 scheme contributed the largest portion with 1,40,407 shares, representing approximately 63% of the total allotment. This was followed by ESOP 2023 with 48,673 shares and ESOP 2018 with 20,400 shares.

Impact on Share Capital

The allotment has resulted in an increase in the bank's paid-up equity share capital structure. The capital expansion reflects the conversion of employee stock options into actual equity holdings.

Regulatory Compliance

The share allotment was conducted in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The bank has informed both the National Stock Exchange of India Limited and BSE Limited about this corporate action through formal disclosure mechanisms. The communication was signed by Manmohan Parnami, Company Secretary and Compliance Officer, ensuring proper regulatory adherence and transparency in the allotment process.

AU Small Finance Bank has achieved remarkable growth over the past nine years, with its balance sheet expanding tenfold despite navigating significant market challenges. Speaking on Tuesday (January 13), MD and CEO Sanjay Agarwal outlined the bank's journey through various economic headwinds including the COVID-19 pandemic, high interest rate environment, and NBFC sector crises.

Strategic Foundation and Partnerships

The bank's growth strategy began with a focused approach on high net-worth clients before establishing a transformative partnership with HDFC Bank. This strategic alliance has been instrumental in shaping AU Bank's approach across multiple dimensions:

Investor Raamdeo Agrawal recognized AU Small Finance Bank as one of the most professionally-run small lenders in the market. He particularly emphasized the bank's prudent decision to avoid unsecured lending during its initial years, which proved crucial for risk management and enabled steady, sustainable growth.

Technology-Driven Expansion

Sanjay Agarwal highlighted the transformative role of technology in the bank's operations. The implementation of AI-led communication and operational tools has significantly enhanced the bank's capabilities:

• Deeper market penetration in previously underserved areas
• More efficient customer service delivery
• Faster scaling compared to traditional banking models
• Enhanced operational efficiency across all business segments

These technological advancements have enabled the bank to serve customers more effectively while maintaining operational excellence and cost efficiency.

Leadership Philosophy and Succession Planning

Addressing the critical aspect of institutional continuity, Sanjay Agarwal emphasized that banks function as public platforms requiring sustainability beyond individual promoters. His leadership philosophy centers on building robust institutional frameworks:

Agarwal credited mentorship from Raamdeo Agrawal as pivotal in his leadership development, particularly in thinking strategically about long-term institution building, strengthening governance structures, and maintaining patience in building sustainable growth.

Future Growth Strategy

Looking ahead over the next two decades, Sanjay Agarwal outlined the bank's strategic priorities for continued expansion. The focus remains on building a much larger institution through disciplined approaches rather than aggressive short-term expansion. Key pillars of the future strategy include:

• Disciplined Capital Management: Maintaining prudent capital allocation and risk management practices
• Strong Team Development: Continuing investment in human capital and leadership development
• Technology Integration: Further leveraging technological innovations for operational excellence
• Longevity Focus: Prioritizing sustainable growth over rapid expansion

The bank's journey from a small finance institution to a significant player in the banking sector demonstrates the effectiveness of combining conservative risk management with strategic innovation and technology adoption.