•  Equitas Small Finance Bank will hold a board meeting on May 30.
•  The move comes amid a sharp 79.7 percent drop in Q4 FY25 net profit to Rs 42.11 crore.
• Despite a 10.9 percent rise in income, shares dipped 0.37 percent to Rs 64.31 on the BSE.

Equitas Small Finance Bank's Board, the largest small finance bank in India, is set to evaluate a fundraising proposal plan for a meeting on May 30, to discuss a plan for raising funds through various authorized methods. The bank is considering a range of options, including the issuance of equity shares, convertible securities, warrants, or other permissible instruments.  Either its options done through public or private offerings, preferential allotments, qualified institutional placements (QIP), or other allowable pathways. The capital surge may happen in one or several phases, contingent upon market conditions and required regulatory approvals.

The anticipated capital infusion is expected to bolster the bank’s growth strategy, enhance its balance sheet, and improve its capital adequacy. Therefore, the bank has not revealed the amount of capital it intends to raise. Serving a varied customer base, Equitas Small Finance Bank caters to individuals typically excluded from conventional financial systems, as well as affluent and mass affluent clients, alongside small and medium enterprises (SMEs) and corporate customers. The bank defines itself as a modern financial institution providing customized products and services across different customer segments.

Thus, the bank’s financial outcomes for the fourth quarter of the fiscal year 2025 outline some struggles. Its standalone net profit experienced a steep decline of 79.7 percent year-on-year, dropping to Rs 42.11 crore in Q4 of fiscal year 2025 from Rs 207.49 crore in Q4 of fiscal year 2024. This decrease occurred despite a 10.9 percent rise in total income, which reached Rs 1,869.42 crore during the same period. The significant downturn in profitability raises concerns about asset quality or operational costs, although specific factors were not addressed in the bank’s brief statement. 

On the Bombay Stock Exchange (BSE), Equitas Small Finance Bank's shares ended 0.37 percent lower at Rs 64.31 on Thursday, indicating subdued investor sentiment following the earnings report. Market participants will closely monitor the results of the board meeting on May 30, as the fundraising initiative could significantly influence the bank’s short-term financial outlook.

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