ESAF Small Finance Bank Jumps 11% After Board Clears Rs 735-Crore NPA Sale To ARC

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ESAF Small Finance Bank shares surged over 11% on Thursday to hit an intraday high of Rs 33.83 on the BSE
ESAF Small Finance Bank shares surged over 11% on Thursday to hit an intraday high of Rs 33.83 on the BSE, after the Thrissur-based lender announced board approval for a major asset sale. The bank will offload a pool of non-performing and technically written-off loans worth Rs 735.18 crore to an asset reconstruction company (ARC).
The sale includes Rs 362.43 crore in non-performing assets (NPAs) and Rs 372.75 crore in technically written-off accounts. ESAF SFB noted it has provisioning coverage of 90.15% against the total pool. The board has authorised the Asset Sale Committee of Executives to execute the necessary formalities. However, the name of the ARC and detailed terms of the transaction were not disclosed.
In a separate development, ESAF Small Finance Bank also announced a strategic tie-up with Maruti Suzuki India to offer retail financing solutions. The two companies signed a memorandum of understanding (MoU) to finance new and used cars, as well as commercial vehicles. The partnership aims to enhance vehicle ownership opportunities, particularly for first-time buyers in tier-II and tier-III cities, by combining Maruti Suzuki's dealer network with ESAF SFB's lending capabilities.
From a technical perspective, the stock's Relative Strength Index (RSI) stands at 43.8, suggesting it is neither overbought nor oversold. The MACD is positive at 0.7 but remains below the signal line. ESAF shares are trading below their 10-day, 20-day, and 200-day simple moving averages, but above the 50-day and 100-day SMAs.
Over the past three months, the stock has gained around 13.5%, although it remains down 43% over the past year. ESAF Small Finance Bank currently commands a market capitalisation of approximately Rs 1,566.9 crore.
ESAF Small Finance Bank, headquartered in Thrissur, Kerala, is a leading small finance bank in India focused on promoting financial inclusion, especially in rural and underserved areas. Originating as a microfinance NGO in 1992, ESAF transitioned into a full-fledged small finance bank in 2017. With over 770 branches across 24 states and a customer base exceeding 8 million, the bank offers a range of products including retail, MSME, agri, gold, and vehicle loans. Known for its strong rural presence—well above RBI's mandated 25% rural lending threshold—ESAF combines physical outreach with digital services. As of FY25, the bank reported strong deposit growth and maintained a healthy CASA ratio, despite recent asset quality challenges. ESAF is also eyeing future transformation into a universal bank, contingent on improving its asset quality and operational metrics.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
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