Equitas Small Finance Bank Ltd - Stock Valuation and Financial Performance

BSE: 543243 | NSE: EQUITASBNK | Bank - Private | Small Cap

Equitas Small Fin. Share Price

66.40 -0.72 -1.07%
as on 30-Jan'25 16:59

DeciZen - make an informed investing decision on Equitas Small Fin.

Overall Rating
Bole Toh

1. Quality

2. Valuation

Undervalued

3. Price Trend

Semi Strong

Equitas Small Finance Bank stock performance -

P/E Ratio (SA):
16.88
Market Cap:
7,565.7 Cr.
52-wk low:
61.4
52-wk high:
109.7

Is Equitas Small Finance Bank Ltd an attractive stock to invest in?

1. Is Equitas Small Finance Bank Ltd a good quality company?

Past 10 year's financial track record analysis by Moneyworks4me indicates that Equitas Small Finance Bank Ltd is a average quality company.

2. Is Equitas Small Finance Bank Ltd undervalued or overvalued?

The key valuation ratios of Equitas Small Finance Bank Ltd's currently when compared to its past seem to suggest it is in the Undervalued zone.

3. Is Equitas Small Finance Bank Ltd a good buy now?

The Price Trend analysis by MoneyWorks4Me indicates it is Semi Strong which suggest that the price of Equitas Small Finance Bank Ltd is likely to Rise-somewhat in the short term. However, please check the rating on Quality and Valuation before investing.

10 Year X-Ray of Equitas Small Fin.:

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end.

Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Equitas Small Finance Bank Ltd has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
Net Interest Income (₹ Cr.)1922495348611,1521,4951,7982,0392,5453,0803,175
YoY Gr. Rt. %-29.7%114.4%61.2%33.8%29.8%20.2%13.4%24.8%21%-
Total Income2974791,2141,7842,3952,9283,6123,9974,8316,2856,823
YoY Gr. Rt. %-61.7%153.3%46.9%34.2%22.3%23.4%10.7%20.9%30.1%-
Adj EPS (₹ ) 0.8210.32.12.33.42.25.273.9
YoY Gr. Rt. %-148.2%-48.3%-69.2%553.1%10.5%45.9%-33.5%130.4%36.4%-
BVPS (₹ )14.816.82020.322.426.129.833.946.452.252.2
YoY Gr. Rt. %-13.7%19%1.6%10.3%16.2%14.4%13.7%36.8%12.6%-
To view Net Profit/Total Funds (%) Colour Rating Guide click here
Net Profit/Total Funds (%)2.33.51.80.31.51.41.81.11.920.9
To view Net NPA to Net Advances (%) Colour Rating Guide click here
Net NPA to Net Advances (%)01.81.81.51.41.71.52.41.21.21
To view Capital Adequacy Ratio (%) Colour Rating Guide click here
Capital Adequacy Ratio (%)----------21.7

CAGR

CAGR Colour Code Guide

9 Years 5 Years 3 Years 1 Years
Net Interest Income36.1%21.7%19.7%21%
Total Income40.4%21.3%20.3%30.1%
Adj EPS27.2%27.5%27.8%36.4%
BVPS15.1%18.4%20.6%12.6%
Share Price - - 6.5% -36%

Key Financial Ratios

RATIOS \ YEARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
Interest Earned / Total Income99.9485.1580.7986.4888.1990.3688.4386.5586.1487.2986.9
Margins To view Margins Colour Rating Guide click here
NIM (%)010.76.16.77.687.57.97.67.16.5
Performance Ratios To view Performance Ratios Colour Rating Guide click here
Return on Equity (%)7.5127.71.69.89.812.57.412.214.47.5
Liquidity Ratio To view Liquidity Ratio Colour Rating Guide click here
CASA (%)0017.329.225.320.534.35242.232-

Recent Performance Summary

Total Income has increased 20.27 CAGR in last 3 years

Net Profit has increased 27.83 CAGR in last 3 years

Net NPA to Net Advances has declined versus last 3 years average

Return on Equity has declined versus last 3 years average to 7.50%

Total income growth is poor in last 4 quarters

Latest Financials - Equitas Small Finance Bank Ltd.

Standalone Consolidated
TTM EPS (₹) 3.9 -
TTM Sales (₹ Cr.) 5,929 -
BVPS (₹.) 52.2 -
Reserves (₹ Cr.) 4,809 -
P/BV 1.27 -
PE 16.88 -
From the Market
52 Week Low / High (₹) 61.36 / 109.70
All Time Low / High (₹) 30.10 / 116.50
Market Cap (₹ Cr.) 7,566
Equity (₹ Cr.) 1,139.4
Face Value (₹) 10
Industry PE 17

Quarterly Results

 Dec'23 YoY Gr. Rt. %Mar'24 YoY Gr. Rt. %Jun'24 YoY Gr. Rt. %Sep'24 YoY Gr. Rt. %
Net Interest Income (₹ Cr.)785 21.3786 11.2801 7.9802 4.8
Interest Earned (₹ Cr.)1,429 34.41,445 251,501 19.71,555 14.4
Total Income (₹ Cr.)1,634 34.41,685 20.91,710 201,794 16.5
Adj EPS (₹)1.8 31.61.8 70.2 -86.60.1 -93.8
NIM (%)8.37 -8.17 -7.97 -7.69 -
Net NPA to Net Advances (%)1.13 -1.17 -0.83 -0.97 -
CASA (%)33.00 -32.00 -31.00 -31.00 -

Management X-Ray of Equitas Small Fin.:

Shareholding Pattern

JavaScript chart by amCharts 3.21.5
JavaScript chart by amCharts 3.21.5Promoters:0%Institutions:58.04%Non-Institutions:41.96%

Promoter's Holding & Share Pledging

JavaScript chart by amCharts 3.21.5Sep22Dec22Mar23Jun23Sep23Dec23Mar24Jun24Sep24Dec240%20%40%60%80%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

Valuation of Equitas Small Fin.

MRP
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MOS
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DP
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Base BVPS
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DPS
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MRP: ₹ 0
DP: ₹0
Base BVPS ₹:
DPS ₹:
MOS (%):
Save my Valuation
Expected BVPS Growth Rate:
0%
Base 0%
30%
Expected Rate of Return:
0%
Base 0%
30%
Future PBV:
0
Base 0
40
YTD 1Y 3Y 5Y 10Y Max
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YTD 1Y 3Y 5Y 10Y Max
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Event Update

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Analyst's Notes

Equitas Small Finance Bank: Q1FY25 Result Update - 26 Jul 2024

  • Gross NPA increased by 7 bps YoY to 2.67% in Q1FY25 as compared to 2.60% in Q1FY24: NNPA improved by 31 bps YoY to 0.81% in Q1FY25 as compared to 1.12% in Q1FY24.
  • Credit cost was at 3.52% as the bank created floating provision for an amount of Rs. 180 Crs to align with latest RBI Guidelines applicable to SFBs desiring to convert into Universal Bank. Credit cost without considering the floating provision is at 1.44%.

Equitas Bank has been vocal about its plans to improve the Provision Coverage Ratio (PCR) to 70% over the next three years timeframe, as stated in its Q4FY24 earnings call.

                                                                                                                 (Source: Q4FY24 Earning Transcript)

  • The increase in provision raised its PCR ratio to 70.29%.

Equitas SFB: MRP update to reflect Post Merger BVPS - 06 Mar 2023

Equitas small finance bank has recently reverse merged with Equitas holding company, this merger has provided bank with additional equity capital. Equity Capital is necessary for bank to grow its lending operations. This merger has increased book value per share for Equitas SFB, which translates to an MRP of 78, which is ~24% higher than the previous MRP

 

Equitas Small Finance Bank: Q2FY23 Result Update - 01 Nov 2022

Equitas Small Finance Bank Ltd
Market Cap 6,375 Cr
CMP 50.8
P/B 1.3xFY23

Results

(INR Cr)

YoY Growth

Comments

Advances

22,779

20%

Healthy loan growth across segments

Net Interest Income

610

26%

NIM improved to 9% from  8.14% year on year

Net Profit

116

182%

Lower provisions at 90 Cr improved profitability

 

Key Highlights-

  • Vehicle Finance (25% of advances) grew 21%, while housing (9% of advances) grew 81%. These loans reduce risky asset exposure in loan book. 
  • CASA Deposits grew by 28% on yearly basis, CASA Ratio at 48%. This reduces cost of funds helping bank increase profitability.
  • Asset Quality improved as GNPA and NNPA stood at 3.82% & 1.93% vs. 4.64% & 2.37% on yearly basis.
  • Provisions reduced from 142 Cr to 90 Cr year on year. Credit cost improved significantly to 1.62% from 3.09% year ago, implying better repayment and lower write offs.

Management Outlook-

  • Credit demand is strong in informal sector; management expects growth in advances to be higher than current quarter.
  • The 20% year on year growth in advances for the first half is expected to improve further in the seasonally active second half. Quality of portfolio remains a comfort with reducing credit cost.
  • Deposits from digital initiatives of the Bank are yielding significant benefits, at 578 Cr.
  • Covid effect is receding and we expect to be back to our pre-covid levels of growth and profitability going forward.

Equitas SFB- Bank with Strong Liability in a Growing Segment - 10 Aug 2022

Equitas Small Finance Bank Ltd | Market Cap 5,572 Cr

CMP Rs. 44.4 | P/B ~1.12x FY23

Click here for 10 year X-ray

About the Company

Equitas Holdings Ltd started operations in 2007 in the microfinance segment. It diversified into vehicle and housing finance in 2011, and entered Small Business Loans in 2013. The company received in-principle approval in Sep’2015 to transform into a Small Finance Bank (SFB). It obtained a scheduled commercial bank license in Sep’16 and commenced banking operations under Equitas Small Finance bank (SFB).

Equitas Small Finance Bank is a subsidiary of Equitas Holdings Ltd. It is the second largest small finance bank in the country and has presence in product segments such as Microfinance, Small Business Loans, Affordable Housing, Vehicle Finance and MSE (Medium & Small Enterprise) finance. As of June’22, it had 17,607 employees and 861 branches in Northern and Southern states of India. It is headquartered in Chennai, Tamil Nadu.

How is Equitas SFB different from a regular bank?

What is different for a Small Finance Banks (or even a Micro-Finance Institution) vs the large size banks is risky assets (which yield high margins), high operational costs (due to higher collection staff), regional concentration (generally they are strong in specific regions and grow subsequently to adjoining regions) and short term loans with low ticket size.

How has Equitas SFB performed on Key Business Parameters?

Loan Mix

Predominantly being a microfinance company, Equitas SFB has a high margin, unsecured portfolio. However, over past few years the bank has been adding new products other than microfinance products to its loan book. Most of these are more secured loans like vehicle finance, affordable housing and secured loans to small businesses. However, the clientele of the bank stays the same (as shown in the pyramid below).

                                 Loan book as of FY20     

 Loan book as of Q1FY23

Small business & agri loans are loans to small businesses, daily wage earners like vegetable vendors, fish-sellers, rickshaw drivers etc. These are the key clientele of Small Finance banks.

                          Source- Ujjivan SFB Investor Presentation

Net Interest Margin (NIM)

Since these types of borrowers are riskier (due to volatile incomes and less credit history), the yields on these loans are still high. Hence, the overall NIMs of these products are still high.

 

The NIMs have fallen because of addition of secured products in the loan book.

                                         Source- Investor Presentation

Equitas has been a South India dominated MFI. However, it has spread its presence across Northern parts of the country to have a geographical diversification. Even now, it has limited presence in west and no presence in East and North-east.

 CASA & Cost of Deposits

Equitas SFB has gained CASA deposit base by giving higher rate of interest on its Deposits. CASA as a proportion to overall liabilities has gone up to 45% (as of June’22) vs 21.4% (as of Mar’21). CASA gives a benefit of low cost capital. A bank with high CASA has an advantage of lower cost of funds. This can be looked at as higher the CASA, lower the price of raw material.  In the graph below, you can see the impact of rising CASA on declining cost of funds.

Cost of Fund (Investor Presentation)

We see Equitas SFB standing out in garnering CASA deposits (vs Ujjivan SFB with only 28% CASA). This makes us favour Equitas SFB over Ujjivan SFB.

RoE/RoA and Asset Quality

In last 2 years, the asset quality has deteriorated in the Covid years with GNPA peaking to 4.06% in FY22. Ex-covid, it has been stable between below 3%. However, when compared to Ujjivan SFB, it has been lower.

                             Equitas SFB                                                    Ujjivan SFB

One of the reasons for stark difference between NPAs of these two SFBs is that Ujjivan SFB disbursed much lesser loans than Equitas SFB during the Covid years FY21 & FY22. Such a stark difference means that either Equitas SFB is aggressive in disbursement and recognizing NPA or it has exceptional underwriting standards. However, post-covid lockdown, most of its stressed loans have started recovering with better collection efficiency. This gives us confidence in the operational efficiency of the bank.

In past few years, Equitas SFB has not performed well, delivering below average ROE. In coming years, with growth in the credit demand and reducing credit costs, ROE is expected to come back.

Management

Equitas was founded by PN Vasudevan, who is the Managing Director and holds 2.5% stake in the company. His experience includes more than two decades of working with Cholamandalam Investment & Finance Co Limited and DCB Bank. In May’22, Mr. Vasudevan has announced that he will be stepping down as MD for personal reasons (to focus on philanthropic activities). However, until the handover in leadership is through, Mr. Vasudevan shall continue in his current role. If they are unable to find a suitable candidate for his succession, the bank seek extension for his tenure till the suitable candidate is found.

Sridharan N is the CFO of the bank. He is a CA by qualification and has been with the holding company since August’2010.

Rohit Phadke is the Head of Assets. He has over 30 years of experience in the financial services industry. He joined the Bank in December 2020 from Cholamandalam Finance where, in his last assignment, he was heading Home Loans.

Murali Vaidyanathan is the Head of Liabilities, Wealth Management, Digital Banking and Marketing. He joined the Bank in Dec’19 as President of Liabilities and Wealth management. Mr. Murali had overall 27 years of experience before joining the Bank.

Future growth prospects

·       Reducing credit costs- Our key hypothesis for the growth in earnings is the reduction of credit cost (Provisions+ Writeoffs- Writeback of provisions). The management has given a guidance of 1.5% credit cost. If this happens, we expect the bank to generate 15%+ ROE starting from FY23 (provided credit costs remain below 2% going forward). This can lead to rerating on the multiple.

·       Diversification towards Secured Loans- Equitas SFB has been diversifying its product mix across secured assets. It has also entered affordable housing segment. Since these loans are secured and long term in nature, they provide stability to the loan book. Also it is growing its vehicle finance book. Both affordable housing and vehicle financing are only 7% and 20% of its loan book (which is ~Rs 27,000 Cr). It can grow faster in this segment versus the market.

·       Reducing Cost of Borrowing- Having secured loans reduces the riskiness of the loan book. Plus the bank is building the CASA and so far it has shown a strong capability to build a CASA. If the bank is able to build CASA further or even if it sustains at current levels, the bank can enjoy lower cost of funds.

·       Large headroom for growth- Since Equitas SFB has been a MFI, it has expertise in dealing with the customer from mid to low pyramid. This is an underserved market which requires efficiency on the fields and local touch. This is not sought after by the big size banks. Going forward, it will be increasing small business loans (mostly secured by assets) to this segment.

·       Possibility of becoming a Universal Bank- Equitas SFB is likely to be merged with Equity Holdings Ltd. The merger is expected to be completed by March’23. After the merger, the lender will consider applying for a universal bank license. This will open another round of opportunities for the bank. However, procuring the licences and starting of universal banking activities would take some time.

Upside & Valuation: Past ROEs have not been good enough due to high credit costs (especially in covid period).  Equitas SFB trades below its fair valuation. Equitas SFB trades at a ~1.1x of its FY23 book value.  We expect the ROE to go above 15% on the back of reduced credit costs and P/B multiple to march towards >1.6x zone. Based on our analysis and growth projection, we value Equitas Small Finance Bank to MRP of Rs. 64.

Key Ratios of Equitas Small Fin.

Adj EPS (Rs.)

Total Income (Cr.)

ROE (%)

BVPS (Rs.)

Company Name CMP(₹)
Change ₹(%)
Market Cap
Net Sales (₹ Cr.)
Latest EPS (₹)
Net Profit Margin %
Latest P/E
Latest P/BV
RBL Bank 162.6 4.8 (3%) Small Cap 12,394 16.1 9.4 10.1 0.6
J&K Bank 99.3 4.4 (4.6%) Small Cap 11,212 19.4 15.8 5.1 0.9
South Indian Bank 25.9 -0.7 (-2.7%) Small Cap 8,613 4.8 12.4 5.4 0.7
Karnataka Bank 190.6 1.6 (0.8%) Small Cap 8,299 35.5 15.7 5.4 0.7
Karur Vysya Bank 233.7 5.6 (2.4%) Small Cap 8,204 23.4 19.6 10 1.7
Equitas Small Fin. 66.4 -0.7 (-1.1%) Small Cap 5,486 3.9 14.6 16.9 1.3
DCB Bank 117.7 -1.2 (-1%) Small Cap 5,362 18.9 10 6.2 0.7
City Union Bank 172.7 -0.4 (-0.2%) Small Cap 5,271 14.3 19.3 12.1 1.4
Tamilnad Mercantile 425.3 -6.3 (-1.5%) Small Cap 4,848 72.2 22.1 5.9 0.8
Jana Small Fin. Bank 447.5 5.5 (1.2%) Small Cap 4,013 66.6 16.7 6.7 1.2
Shows rows:

Profit And Loss

(All Figures are in Crores.)
PARTICULARSMar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Income 4791,2141,7842,3952,9283,6123,9974,8316,285
Interest Income 4089811,5432,1122,6453,1943,4604,1625,486
Other Income 71233241283282418538670799
Expenditure 3941,1101,7522,1842,6843,2283,7164,2585,486
Interest Expense 1554476829601,1501,3961,4211,6172,407
Operating Expenses 1845098811,0081,1801,3291,7042,0382,501
Provisions55154189216354502591602578
Profit Before Tax131161493243515113787691,063
Taxes 46571711310712797195264
Profit After Tax 8510432211244384281574799
Adjusted EPS (₹)2.011.040.322.092.313.372.245.167.04
Dividend Payout Ratio (%)0%0%0%0%0%0%0%19%14%

Balance Sheet

(All Figures are in Crores.)
PARTICULARSMar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24

Equity and Liabilities

Share Capital 4231,0061,0061,0061,0531,1391,2521,1111,135
Total Reserves 2881,0061,0381,2481,6912,2572,9934,0424,793
Minority Interest000000000
Deposits01,9215,6049,00710,78816,39218,95125,34836,129
Borrowings 1,6384,7795,1773,9735,1354,1652,6162,9741,788
Other Liabilities 655334855296287551,1361,4841,459
Total Liabilities 2,4149,24513,31015,76319,29624,70826,94834,95845,304

Assets

Balance with RBI 52483864033815152,0771,1743,500
Balance with Banks968668258582,1562,864567079
Investments 01,8903,8572,3442,3433,7054,4506,6659,065
Advances 2,2275,7027,70711,59513,72816,84819,37425,79930,964
Net Block 11274280236210184189338537
Other Assets752512543254755917918721,091
Total Assets 2,4149,24513,31015,76319,29624,70826,94834,95845,304

Cash Flow

(All Figures are in Crores.)
PARTICULARSMar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Cash Flow From Operating Activity -3361,3342061,7994402,044159-9984,298
Cash Flow From Investing Activity -9-405-4-7-72-43-89-261-422
Cash Flow From Financing Activity 168-563-28-1,706908-1,154-1,31760-1,612
Net Cash Flow -177366173861,276847-1,246-1,1992,264
PARTICULARSMar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24

Operational & Financial Ratios

EPS (₹)210223257
DPS (₹)000000011
BVPS (₹)172020222630344652

Margin Ratios

Yield on Advances (%)18.317.220.018.219.319.017.916.117.7
Yield on Investments (%)0.03.84.411.16.97.16.55.17.1
Cost of Liabilities (%)9.56.76.37.47.26.86.65.76.4
NIM (%)10.96.16.77.68.07.57.97.67.1
Interest Spread (%)8.910.513.710.812.112.211.310.411.4

Performance Ratios

ROA (%)3.51.80.31.51.41.81.11.92.0
ROE (%)12.07.71.69.89.812.57.412.214.4
ROCE (%)12.212.56.911.510.812.29.213.716.7

Efficiency Ratios

Cost to Income Ratio (%)56.666.480.070.366.460.066.263.464.5
Operating Costs to Assets (%)7.65.56.66.46.15.46.35.85.5

Valuation Parameters

Price/Book(x)0.00.00.00.00.02.01.51.51.8

Equitas Small Finance Bank Ltd Stock News

Equitas Small Finance Bank Ltd FAQs

Company share prices are keep on changing according to the market conditions. The closing price of Equitas Small Fin. on 30-Jan-2025 16:59 is ₹66.40.
Market capitalization or market cap is determined by multiplying the current market price of a company's shares with the total number of shares outstanding. As of 30-Jan-2025 16:59 the market cap of Equitas Small Fin. stood at ₹7,565.7.
The latest P/E ratio of Equitas Small Fin. as of 30-Jan-2025 16:59 is 16.88.
The latest P/B ratio of Equitas Small Fin. as of 30-Jan-2025 16:59 is 1.27.
The 52-week high of Equitas Small Fin. is ₹109.7 and the 52-week low is ₹61.36.
The TTM revenue is Trailing Twelve Months sales. The TTM revenue/sales of Equitas Small Fin. is ₹5,929 ( Cr.) .

About Equitas Small Finance Bank Ltd

The Bank was originally incorporated as V.A.P. Finance Private Limited on June 21, 1993 at Madras, Tamil Nadu as a private limited company under the Companies Act, 1956, and was granted the certificate of incorporation by the Registrar of Companies, Tamil Nadu at Chennai (RoC). The Bank became a deemed public limited company under section 43A of Companies Act, 1956 on March 5, 1994 and the name of the Bank was changed to V.A.P. Finance Limited and the certificate of incorporation of the Bank was endorsed by the RoC to that effect. The Bank thereafter became a private limited company under section 31(1) of the Companies Act, 1956 and a fresh certificate of incorporation dated March 30, 2011 was granted by the RoC consequent upon change of name from V.A.P. Finance Limited to V.A.P. Finance Private Limited. A fresh certificate of incorporation dated August 12, 2011 was granted by the RoC consequent upon change of name from V.A.P. Finance Private Limited to Equitas Finance Private Limited. A fresh certificate of incorporation was granted by the RoC on September 29, 2015 consequent upon change of name from Equitas Finance Private Limited to Equitas Finance Limited pursuant to conversion of the Bank into a public limited company. The Bank’s Promoter, EHL was granted the RBI In-Principle and RBI Final Approval on October 7, 2015 and June 30, 2016 respectively; to establish a small finance bank (SFB). Subsequently, the Bank was converted into an SFB. A fresh certificate of incorporation dated September 2, 2016 was granted by the RoC consequent upon change of name of the Bank from Equitas Finance Limited to Equitas Small Finance Bank Limited. The Bank was included in the second schedule to the RBI Act pursuant to a notification dated December 23, 2016 issued by the RBI and published in the Gazette of India dated February 4-February 10, 2017.

The bank was the largest Small Finance Bank (SFB) in India in terms of number of banking outlets, and the second largest SFB in India in terms of assets under management and total deposits in Fiscal 2019. The bank offers a range of banking products and services to customers with a focus on serving the financially unserved and underserved customer segments in India. The bank’s strength lies in promoting financial inclusion within these segments, with its group beginning operations in 2007 as an NBFC providing microfinance loans through EMFL. The bank has been providing housing finance since 2011 through EHFL. The bank has also been providing vehicle finance and MSE finance through the Erstwhile NBFC that received its asset finance license in 2012, primarily to economically disadvantaged households. While its business model has transitioned over the years, the provision of sustainable credit to unserved and underserved segments has remained its core focus.

Business area of the bank

The bank’s focus customer segments include individuals with limited access to formal financing channels on account of their informal, variable and cash-based income profile. The bank offers a range of financial products and services that address the specific requirements of these customer segments by taking into account their income profile, nature of business and type of security available. The bank’s asset products are suited to a range of customers with varying profiles. These include provision of small business loans comprising LAPs, housing loans, and agriculture loans to micro-entrepreneurs, microfinance to JLGs predominantly comprising women, used and new commercial vehicle loans to drivers and micro-entrepreneurs typically engaged in logistics, MSE loans to proprietorships, and corporate loans. On the liability side, its target customers comprise mass and mass-affluent individuals to whom it offers current accounts, salary accounts, savings accounts, and a variety of deposit accounts. In addition, the bank also provides non-credit offerings comprising ATM-cum-debit cards, third party insurance, mutual fund products, and issuance of FASTags.

Awards, accreditations and recognitions:

  • 2016: The Bank was awarded the Marketing Excellence Award in BFSI sector at the Global Marketing Excellence Awards, 2016.
  • 2017: The Bank was awarded the Marketing Excellence Award, 2017 in the BFSI sector by the Times Network National Awards For Marketing Excellence, 2017.
  • 2017: The Bank was awarded the Disability Matters Asia – Pacific Market Place Award, 2017 by Disability Matters.
  • 2017: The Bank was awarded the India’s Best Bank Award, 2017-18 by the Financial Express in SFB category.
  • 2017: The Bank was selected as one of the 67 Innovative Practices and Policies by the Zero Project.
  • 2018: The Bank was awarded the ABP News Brand Excellence Award, 2018 in banking, financial services and insurance (BFSI) sector.
  • 2018: The Bank was awarded the Skoch Order of Merit for qualifying amongst the top ranking banking and finance projects in India for Equitas Ecosystem.

Major events and milestones:

  • 1993: Incorporation as V.A.P. Finance Private Limited.
  • 2015: EHL received the RBI In-Principle Approval.
  • 2016: Amalgamation of EMFL and EHFL with the Bank pursuant to the Amalgamation Scheme.
  • 2016: Commencement of operations of the Bank as an SFB.
  • 2016: EHL received the RBI Final Approval.
  • 2018: Commencement of MSE Financing products by the Bank.
  • 2018: New CV financing portfolio of the Bank crossed Rs 5,000 million.
  • 2018: Advances including IBPCs crossed Rs 100,000 million.
  • 2019: Total deposits of the Bank crossed Rs 100,000 million.
  • 2019: Crossed 15,000 employees.
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