Ujjivan Small Finance Bank has officially responded to exchange queries regarding its capital raising plans, confirming the need for substantial additional funds to support its ambitious growth trajectory.

Capital Requirement Guidance

During an analyst day event held on September 8, 2025, Ujjivan Small Finance Bank's Managing Director and CEO, Sanjeev Nautiyal, provided guidance on the bank's future capital requirements. The bank stated that it would need additional capital of approximately Rs 2,000.00 crores over the next 18-24 months to support its growth plans outlined in its five-year outlook until FY 2029-30.

Clarification on Media Reports

The bank's statement came in response to media reports suggesting plans to raise Rs 2,000.00 crore via the Qualified Institutional Placement (QIP) route. In its clarification to the stock exchanges, Ujjivan Small Finance Bank confirmed that the information provided during the analyst day event was in line with the media reports.

Transparency and Disclosure

Ujjivan Small Finance Bank emphasized its commitment to transparency, stating that it has made all necessary disclosures in accordance with applicable regulations. The bank clarified that the capital raising guidance was given in response to media queries about future plans and the status of its universal bank application.

Five-Year Outlook

The capital requirement is tied to the bank's five-year outlook, which was presented during the analyst day event. While specific details of the growth trajectory were not provided in the exchange filing, the substantial capital requirement suggests ambitious expansion plans for Ujjivan Small Finance Bank.

Regulatory Compliance

In its response to the stock exchanges, Ujjivan Small Finance Bank assured that it has no additional material price-sensitive information requiring disclosure at this time. The bank reiterated its commitment to keeping the stock exchanges informed of all price-sensitive information in compliance with applicable laws and regulations.

The confirmation of Ujjivan Small Finance Bank's substantial capital requirements provides insight into the bank's growth ambitions and its proactive approach to meeting future financial needs. As the bank moves forward with its expansion plans, investors and market watchers will likely keep a close eye on how it navigates the capital raising process in the coming months.

Ujjivan Small Finance Bank (USFB) is poised for significant growth and transformation as it awaits a decision on its commercial banking license application from the Reserve Bank of India (RBI) by December. The bank, which has been making strides in diversifying its portfolio and strengthening its financial position, has outlined ambitious plans for expansion and capital raising.

Ambitious Loan Book Target

Ujjivan Small Finance Bank has announced its target to achieve a loan book of ₹1 lakh crore by 2030. This ambitious goal aligns with the bank's broader expansion strategy and vision for long-term growth.

Exploring New Sectors

As part of its growth strategy, USFB is exploring expansion into universal banking and housing finance sectors. This move indicates the bank's intention to diversify its offerings and tap into new market segments.

Awaiting RBI Decision

USFB expects the RBI to decide on its commercial banking license application by December, with the application reportedly in an advanced stage. This transition, if approved, would mark a significant milestone in the bank's journey, potentially opening up new avenues for growth and operational flexibility.

Expansion Plans

The bank has unveiled plans to expand its physical presence significantly over the next five years. USFB aims to open 400 new branches during this period, which would substantially increase its current network of 752 banking outlets across 26 states and union territories.

Capital Raising Initiative

To support its growth ambitions, USFB is considering raising ₹2,000.00 crore through a Qualified Institutional Placement (QIP) within the next two years. This capital infusion would bolster the bank's financial strength and provide the necessary resources for its expansion plans.

Strong Financial Position

USFB's financial performance has been robust, with the bank reporting its highest-ever profit after tax (PAT) of ₹1,281.00 crore, translating to a return on assets (ROA) of 3.50% and a return on equity (ROE) of 26.10%. The bank's gross loan book stood at ₹32,122.00 crore, while deposits reached ₹37,630.00 crore.

Diversification Strategy

The bank has been actively diversifying its loan portfolio, with the secured loan book share increasing to 44%. USFB aims to further increase this to 65-70% by FY30, indicating a strategic shift towards a more balanced and secure lending profile.

Digital Transformation

USFB has been investing heavily in digital initiatives, with 92.40% of total transactions now being digital. The bank has 41 lakh unique digital customers and has processed over 53 crore digital transactions.

Future Outlook

Looking ahead to FY30, USFB has set ambitious targets:

• Grow its liability base around 3 times
• Increase CASA percentage to around 35%
• Expand gross loan book to approximately ₹1 lakh crore
• Maintain net interest margins between 6% to 7%
• Reduce cost-to-income ratio to around 55%
• Achieve a return on assets of 1.80% to 2.00% and return on equity of 16% to 18%

Conclusion

Ujjivan Small Finance Bank's potential transition to a commercial bank, coupled with its expansion plans and strong financial performance, positions it for significant growth in the coming years. The bank's focus on diversification, digital transformation, and capital adequacy demonstrates its commitment to building a robust and sustainable banking franchise.

As USFB awaits the RBI's decision on its commercial banking license, it continues to strengthen its foundation, aiming to become a key player in India's evolving banking landscape.