Equitas Small Finance Bank Limited has released its business update for the quarter ended December 31, 2025, showcasing robust growth across key financial metrics. The bank reported significant improvements in advances, deposits, and collection efficiency as part of its regulatory disclosure under SEBI regulations.

Financial Performance Overview

The bank demonstrated strong growth momentum with gross advances reaching ₹43,269 crores, marking a substantial 15.86% year-on-year increase and 10.60% quarter-on-quarter growth. Total deposits stood at ₹43,668 crores, reflecting a 7.24% year-on-year growth despite a marginal 0.97% quarterly decline.

Segment-wise Performance Analysis

The bank's loan portfolio showed diversified growth with non-micro finance and micro loans segment contributing ₹38,110 crores, representing a 19.19% year-on-year increase. The micro finance and micro loans segment reached ₹5,159 crores, though it declined 3.93% year-on-year, it showed remarkable 51.94% quarter-on-quarter recovery.

Operational Efficiency Improvements

Equitas Small Finance Bank achieved significant operational improvements during the quarter. The bank completed robust disbursements of ₹6,557 crores, marking a 22% quarter-on-quarter and 28% year-on-year growth. The cost of funds improved to 7.13% from 7.35% in the previous quarter, indicating enhanced funding efficiency.

Asset Quality and Collection Performance

The bank demonstrated substantial improvement in asset quality metrics. The 1-90 DPD (Days Past Due) in the microfinance and micro loans segment consistently reduced from 8.45% in April 2025 to 2.77% in December 2025. Collection efficiency in the X bucket improved to 90.61% in December 2025.

Strategic Asset Management

During the quarter, the bank executed two strategic transactions involving non-performing assets sales to Asset Reconstruction Companies. The bank sold NPA assets worth approximately ₹55 crores and technical written-off assets worth ₹294 crores to ARCs, demonstrating proactive asset management.

Regional Performance and Risk Management

The Small Business Loan segment showed notable improvement, particularly in Karnataka, where net slippages reduced significantly to 4.61% in Q3FY26 from 8.19% in Q2FY26. The overall net slippages in the SBL segment improved to 1.47% in Q3FY26 from 2.48% in the previous quarter.

Shakti Pumps (India) Limited has announced a strategic investment of ₹3.00 crores in its wholly owned subsidiary, Shakti Energy Solutions Limited (SESL), to establish a greenfield solar manufacturing facility. The investment, disclosed under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, aims to expand the company's presence in the renewable energy sector.

Investment Details and Manufacturing Facility

The investment will fund the establishment of a high-efficiency Solar DCR cell and Solar PV modules manufacturing plant in Pithampur, Madhya Pradesh. The facility is designed with a substantial production capacity of 2.20 GW, positioning the company to capitalize on India's growing solar energy market.

Subsidiary Performance and Background

Shakti Energy Solutions Limited, incorporated on September 6, 2010, has demonstrated strong growth in recent years. The subsidiary currently manufactures solar structures and deals in solar rooftop solutions, with plans to expand into solar DCR cell and PV module manufacturing.

The subsidiary has shown consistent growth, with turnover increasing from ₹99.15 crores in FY 2023 to ₹216.53 crores in FY 2025, representing significant year-on-year expansion.

Strategic Rationale and Regulatory Compliance

The investment aligns with Shakti Pumps' strategy to diversify into renewable energy manufacturing, complementing its core pumping solutions business. As SESL is a wholly owned subsidiary, the transaction does not fall under related party transactions, and no governmental or regulatory approvals are required for the investment.

The company will issue equity shares to facilitate the investment, with the completion timeline indicated as same-day processing. This expansion into solar manufacturing represents a strategic move to capture opportunities in India's rapidly growing renewable energy sector.