Ujjivan Small Finance Bank shares surge 3% on ambitious Rs 1 lakh crore loan book target by FY30

Ujjivan Small Finance Bank shares surged 3% following the announcement of its ambitious strategic plan to scale its gross loan book to ₹1 lakh crore by FY30. The bank, which received its small finance bank license in 2017, has seen steady growth over the years, with its gross loan book expanding from ₹7,560 crore in FY17 to ₹33,287 crore in Q1FY26.

Ujjivan’s growth strategy is anchored on a diversified loan portfolio, expansion of its liability franchise, and cost-efficient operations aimed at delivering sustained profitability. The bank has gradually increased the share of secured loans from 16% in FY19 to 46% in Q1FY26, with plans to raise this to 65%-70% by FY30. Key growth areas include affordable housing, micro mortgages, MSME lending, vehicle finance, gold loans, and agri loans, along with plans to expand into mid-corporate lending. Micro banking continues to serve as the foundation, with customers moving from group to individual loans over time.

On the liability side, Ujjivan has built a robust retail deposit base, with CASA and retail term deposits making up 72% of total deposits of ₹38,619 crore as of Q1FY26. CASA balances stood at ₹9,381 crore, accounting for 24.3% of deposits, with a long-term target of reaching 35% by FY30. The bank plans to achieve this through the expansion of its branch network from 752 to approximately 1,150, alongside deepening cross-selling of products such as IPO-ASBA, insurance, mutual funds, remittances, and co-branded credit cards.

Profitability is a major focus for Ujjivan, with the bank targeting a cost-to-income ratio of around 55%, supported by technology upgrades, optimized staffing, and efficient branch operations. Prudent credit underwriting and collection mechanisms are expected to drive a return on assets (RoA) of 1.8%-2.0% and a return on equity (RoE) of 16%-18% by FY30.

Ujjivan remains well-capitalized, with a CRAR of 22.8% and Tier I at 21.2% as of Q1FY26. The bank’s shift toward secured lending enhances capital efficiency and provides headroom to support long-term growth without the immediate need for additional capital.

Commenting on the bank’s future roadmap, Managing Director & CEO Sanjeev Nautiyal said, “Our plan to reach a ₹1 lakh crore gross loan book by FY30 builds on the foundation laid since 2017. With a diversified customer base of over 97 lakh across 26 states and union territories, we are strategically positioned to achieve our targets while focusing on mass, aspiring, and emerging affluent segments of India.”

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