Synopsis: Utkarsh Small Finance Bank Ltd’s shares declined after private equity investor Olympus Capital Holdings Asia sold 64.1 lakh right shares in a bulk deal.
A banking stock came under pressure on Tuesday after a major private equity investor sold a portion of its shares in the company. The decline reflected muted investor sentiment following the transaction. The fall was aggravated by the sale of rights entitlements, which heightened dilution concerns and triggered selling in the stock.
Utkarsh Small Finance Bank Ltd, with a market capitalization of Rs. 3,535.91 crore, opened at Rs. 20.41 after a previous close of Rs. 20.54 and touched an intraday low of Rs. 19.30 before recovering slightly. The stock slipped 6.03 percent from the last closing price.
Utkarsh Small Finance Bank Rights opened today at Rs. 3.45, compared to the previous close of Rs. 3.41, but slipped sharply to an intraday low of Rs. 2.61, recording a steep decline of 23.46 percent.
What’s the News?
Olympus ACF PTE Limited, an entity under private equity firm Olympus Capital Holdings Asia, offloaded 64.1 lakh rights shares of Utkarsh Small Finance Bank at an average price of Rs. 3.53 per share, valuing the transaction at approximately Rs. 2.26 crore. The sale of these rights entitlements amplified selling pressure in the counter, as it raised concerns over dilution and signalled reduced participation by a key institutional investor.
Financial Snapshot – Q1FY26
Quarter-on-Quarter (QoQ) Performance: Utkarsh Small Finance Bank reported largely flat revenues but sharp deterioration in profitability in Q1FY26. Sales increased marginally from Rs. 880 crore to Rs. 881 crore, a slight rise of 0.1 percent. The company’s financing loss widened sharply from Rs. 276 crore to Rs. 457 crore. Profit before tax slipped from Rs. 11 crore to a loss of Rs. 319 crore, while the net result turned from a profit of Rs. 3 crore to a loss of Rs. 239 crore, marking a steep reversal. Asset quality also weakened, with gross NPA rising from 9.43 percent to 11.42 percent and net NPA inching up from 4.84 percent to 5 percent.
Year-on-Year (YoY) Performance: On an annual comparison, the lender reported a notable downturn across all key financial metrics. Sales declined from Rs. 966 crore to Rs. 881 crore, a fall of 8.8 percent. The financing result swung from a profit of Rs. 82 crore to a loss of Rs. 457 crore. Profit before tax turned negative, dropping from Rs. 186 crore to a loss of Rs. 319 crore. Net profit too slipped from Rs. 137 crore to a loss of Rs. 239 crore. Asset quality weakened significantly as gross NPA surged from 2.78 percent to 11.42 percent and net NPA spiked from 0.26 percent to 5 percent.
About the Company
Utkarsh Small Finance Bank Limited is an Indian small finance bank offering a wide range of banking and financial services to individuals and businesses. Its operations span Corporate and Wholesale Banking, Retail Banking, Treasury, and Other Banking Operations. The bank provides deposit accounts, term and recurring deposits, certificates of deposits, loans across micro, MSME, and retail segments, and digital banking services. It also offers mutual funds, insurance, and remittance solutions. Established in 2009 and headquartered in Varanasi, Uttar Pradesh, the bank is a subsidiary of Utkarsh CoreInvest Limited.
-Manan Gangwar
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