In a bold move that’s energizing investor sentiment, Ujjivan Small Finance Bank has unveiled an ambitious roadmap to scale its loan book to Rs 1 lakh crore by FY2030, while also expressing confidence in securing a commercial banking licence from the Reserve Bank of India. The announcement, made during its Investor and Analyst Meet 2025, triggered a 4 percent rally in its stock, which traded at Rs 44.21 on September 8, 2025.
The bank’s strategic blueprint includes aggressive branch expansion, a stronger focus on secured lending, and a significant capital raise via Qualified Institutional Placement (QIP). With its commercial banking licence application now in advanced stages, Ujjivan is positioning itself as a formidable player in India’s evolving financial landscape.
Momentum Picks Up With Key Growth Targets
- Ujjivan aims to grow its gross loan book to Rs 1 lakh crore by FY2030
- Deposit target set at Rs 1.2 lakh crore, with CASA ratio goal of 35 percent
- Plans to expand branch network from 752 to 1,150 over five years
- QIP of up to Rs 2,000 crore proposed to fund growth initiatives
- Commercial banking licence decision expected from RBI by December 2025
Loan Book Expansion And Portfolio Diversification
The bank’s current gross loan book stands at Rs 33,287 crore, reflecting an 11 percent year-on-year growth. A key highlight is the shift toward secured lending, which now comprises 45.5 percent of the portfolio, up from 31.3 percent last year. Ujjivan plans to further increase this to 65–70 percent, focusing on:
- Affordable housing and micro mortgages
- MSME and vehicle finance
- Gold loans and agricultural lending
This diversification is expected to stabilize asset quality and enhance profitability, especially as the bank moves beyond its microfinance roots.
Deposit Growth And CASA Strategy
Ujjivan’s deposit base rose 19 percent year-on-year to Rs 38,619 crore in Q1 FY26. Retail term deposits and CASA together accounted for 72 percent of total deposits. The bank’s CASA deposits grew 13 percent to Rs 9,381 crore, and the long-term goal is to push CASA to 35 percent of total deposits by FY2030.
This will be supported by branch expansion and deeper customer engagement, especially in semi-urban and rural markets where Ujjivan has a strong presence.
Commercial Banking Licence: A Game-Changer In Sight
The bank’s application for a full-service commercial banking licence is currently under advanced review by the RBI. Management expressed optimism that a decision could be reached by December 2025. If approved, Ujjivan would transition from a small finance bank to a universal bank, unlocking new revenue streams and operational flexibility.
This move would allow Ujjivan to:
- Offer a wider range of products including corporate loans and forex services
- Compete more directly with mid-sized private banks
- Access broader capital markets and institutional funding
Asset Quality And Financial Stability
Ujjivan’s asset quality remains stable, with gross NPA at 2.5 percent and net NPA at 0.7 percent as of June 2025. Collection efficiency stood at an impressive 99.3 percent, indicating strong borrower discipline and effective recovery mechanisms.
The bank’s disbursements in Q1 FY26 reached Rs 6,539 crore, marking a 24 percent year-on-year growth. These metrics reinforce investor confidence in the bank’s operational resilience and growth trajectory.
Investor Response And Market Performance
Following the announcement, Ujjivan’s stock surged 4.3 percent intraday to Rs 44.40, before settling at Rs 44.21. The stock has gained over 30 percent year-to-date, reflecting growing optimism around its strategic roadmap and regulatory progress.
Analysts view the Rs 1 lakh crore loan book target and licence pursuit as transformative moves that could re-rate the stock and attract long-term institutional interest.
Sources: ET Now, Upstox News, Bloomberg Terminal
