Capital Small Finance Bank has received approval from the BSE Limited for a significant change in its shareholding structure. The bank has been granted permission to reclassify certain members of its promoter group to public shareholders, a move that could potentially impact the bank's ownership dynamics.

Key Details of the Reclassification

The reclassification involves 14 entities from the promoter and promoter group category, including Dinesh Gupta, who holds a notable stake in the bank. Here's a breakdown of the key figures involved in this reclassification:

The reclassification also includes several other individuals and entities who currently hold no shares in the bank, such as Harish Kumar Gupta, Kumar Shalya Gupta, Shubham Gupta, Monica Mittal, and corporate entities like DSB Edutech Private Limited (now known as Empower Tech Private Limited), KMG Consultants, DSB Law Group Private Limited, and Dinesh Gupta & Co., Company Secretaries.

Implications of the Reclassification

This move is in line with Regulation 31A of SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. The reclassification could potentially alter the bank's shareholding structure, moving these entities from the promoter category to public shareholders.

While the immediate impact on the bank's operations may be limited, this change could have implications for future decision-making processes and corporate governance structures. It's worth noting that the total shareholding being reclassified amounts to approximately 0.74% of the bank's equity.

Regulatory Compliance

Capital Small Finance Bank is required to ensure compliance with all relevant disclosures related to this reclassification, as mandated by SEBI regulations. This includes timely announcements of material events that may arise from this change in shareholding structure.

As the banking sector continues to evolve, such corporate actions reflect the dynamic nature of ownership structures in Indian financial institutions. Investors and market watchers will likely keep a close eye on any subsequent changes or impacts resulting from this reclassification.

Capital Small Finance Bank (CSFB) has demonstrated resilience and growth in its Q2 FY26 performance, despite facing challenges from floods in northern India. The bank reported a 17.7% year-on-year increase in gross advances, reaching INR 7,907.00 crores, while maintaining asset quality and expanding its deposit base.

Key Financial Highlights

• Gross Advances: INR 7,907.00 crores, up 17.7% year-on-year
• Total Deposits: INR 9,317.00 crores, a 20% year-on-year growth
• CASA Ratio: 33.9%
• Net Interest Margin (NIM): 4.04%, compared to 4.1% in the previous quarter
• Profit After Tax: INR 35.00 crores, a 5% year-on-year increase
• Gross NPA: Improved to 2.70% from 2.75% in the previous quarter
• Net NPA: 1.38%

Loan Book Composition and Growth

The bank's loan book remains well-diversified across sectors:

Fresh disbursements for the quarter stood at INR 805.00 crores, registering a robust 36% year-on-year growth. The bank maintains its FY26 growth guidance of over 20% for advances and aims to double its loan book over the next three to three-and-a-half years.

Deposit Growth and Expansion Strategy

CSFB's total deposits reached INR 9,317.00 crores, marking a strong 20% year-on-year growth. The bank's expansion strategy focuses on deepening its presence in contiguous states and intensifying penetration within existing markets. Currently, the bank operates 200 branches, with plans to increase this to 300 by FY29, targeting 30% of branches outside Punjab.

Asset Quality and Risk Management

Despite the flood impact in northern regions affecting some Punjab districts, CSFB's asset quality remained stable. The bank's prudent risk management practices and diversified portfolio helped mitigate the impact of natural calamities. The gross NPA improved to 2.70% from 2.75% in the previous quarter, while net NPA stood at 1.38%.

Future Outlook

Capital Small Finance Bank remains optimistic about its growth prospects, targeting to double its loan book by FY29. The bank aims to improve its Return on Assets (ROA) to 1.6% and Return on Equity (ROE) to over 15% by FY29. With a strong capital adequacy ratio of 24.2% and an average liquidity coverage ratio of 234%, CSFB is well-positioned for sustainable growth in the coming years.

The bank's performance in Q2 FY26 demonstrates its ability to navigate challenging environments while maintaining growth momentum. As CSFB continues to expand its geographical footprint and diversify its loan book, it is poised to capitalize on opportunities in India's growing banking sector.