Synopsis:- Shares fell around 4% after dropping 6% intraday, following RBI’s decision to return its universal bank application. Despite 22.4% deposit growth, 33.2% CASA growth, and 777 branches, concerns over portfolio mix, negative margins (-2% to -3%), and delayed transition weighed on sentiment.
The shares of this small finance bank plummeted around 6 percent in today’s trading session following the lender’s announcement that its application to convert into a universal bank was returned by the Reserve Bank of India, raising concerns over its growth roadmap.
With a market capitalisation of Rs 11,329.03 crore, the shares of Ujjivan Small Finance Bank Ltd were trading at Rs 58.29 per share, decreasing around 3.40 percent as compared to the previous closing price of Rs 60.34 apiece.
RBI Setback Impact
The shares of Ujjivan Small Finance Bank Ltd have seen bearish movement after the RBI returned its application to transition into a universal bank. While the regulator acknowledged efforts to diversify the loan book, it highlighted the need for further improvement, indicating that the bank’s current portfolio mix still requires strengthening before approval.
Moreover, this delay impacts the bank’s long-term strategy, as the transition is key to expanding its business mix and increasing secured lending. The move was expected to provide operational flexibility and access to a broader customer base. However, with RBI advising reapplication later, execution and portfolio diversification remain critical going forward.
Financial & other Highlights
The company delivered a steady performance, with revenue rising 10% from Rs 1,591 crore to Rs 1,752 crore, indicating healthy business growth. More importantly, net profit surged 71% from Rs 109 crore to Rs 186 crore, reflecting strong margin expansion, improved operating efficiency, and better cost control, suggesting a significant improvement in overall earnings quality and profitability.
From Dec 2024 to Dec 2025, operating performance remained under pressure, with financing profit staying in negative from -36 crore to -51 crore after deeper losses during mid-year. Meanwhile, financing margin (OPM equivalent) remained in negative territory, moving from -2% to -3%, reflecting continued stress on spreads and profitability despite gradual stabilization.
Ujjivan Small Finance Bank Ltd continues to strengthen its franchise, adding 24 branches in FY26 to reach 777 branches. Deposits grew 22.4% YoY to Rs 42,223 crore with a CD ratio of 88%. CASA ratio stayed above 27%, while CASA deposits rose 33.2% YoY. Cost of funds declined to 7.08%, with guidance around ~7% ahead.
Ujjivan Small Finance Bank Ltd is a leading small finance bank focused on financial inclusion, offering retail banking, microfinance, and SME lending services. With a strong presence across urban and semi-urban markets, the bank aims to build a diversified loan book while expanding its deposit base and improving overall asset quality.
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