ESAF SFB shares surge 11% as board approves to offload Rs 735 cr bad loan to ARC

ESAF Small Finance Bank rallies on loan sale approval

Shares of ESAF Small Finance Bank surged 11 percent to Rs 34 per share on June 19 after the bank’s board approved the sale of non-performing assets (NPAs) and technically written-off loans worth Rs 735.18 crore to an asset reconstruction company (ARC).

The loan pool includes Rs 362.43 crore in NPAs and Rs 372.75 crore in technically written-off accounts. The bank stated that it has already made provisions covering 90.15 percent of the total loan pool.

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The board has authorised the Asset Sale Committee of Executives to carry out the necessary steps to complete the transaction. However, the name of the ARC and the terms of the sale have not been disclosed.

Separately, earlier this week, Maruti Suzuki India announced a partnership with ESAF Small Finance Bank to provide retail financing solutions for new cars, used cars, and commercial vehicles.

The two companies have signed a memorandum of understanding (MoU) aimed at offering easy and flexible financing options, especially designed for first-time car buyers. Maruti Suzuki said the tie-up will help expand access to vehicle ownership through their combined reach across tier-II and tier-III cities.

On the financial front, ESAF Small Finance Bank reported that its net loss narrowed to Rs 183 crore in the March-ended quarter, down from a loss of Rs 210 crore in the December quarter. However, in the fourth quarter of 2024, the bank had posted a profit of Rs 433 crore.

The bank’s total income during the March quarter slipped slightly to Rs 103 crore, compared to Rs 106 crore in the December quarter.

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