Ujjivan, Equitas small finance banks turn tricky bet amid mounting NPA woes

Equitas and Ujjivan posted proforma NPA of 4.16 per cent and 4.8 per cent respectively in Q3, highest ever in many years

Catch them young was one of the key selling propositions in the initial public offerings (IPOs) of Ujjivan Small Finance Bank (SFB) and Equitas SFB.

While Ujjivan was listed in December 2019, Equitas hit the market in October last year. The pandemic was not reckoned on when Ujjivan SFB was listed, while in Equitas’ case, the effect of the pandemic wasn’t anticipated to be very strong as it turned out to be.

It was in the December 2020 quarter (Q3) results that it became obvious that both banks would take a while to heal. Ujjivan’s proforma gross non-performing assets (without considering the