Ujjivan’s FY30 Forecast: More Branches, More Loans, One Trillion Reasons to Watch

In a bold declaration of its long-term growth strategy, Ujjivan Small Finance Bank (USFB) has announced its target to expand its gross loan book to ₹1 trillion (₹1 lakh crore) by FY30, representing a threefold increase from its current portfolio. The bank expects to achieve this milestone through annual growth rates ranging between 20% and 25%, supported by aggressive branch expansion, portfolio diversification, and a strategic shift toward secured lending.

 

This announcement, made during the bank’s investor presentation and subsequent media briefings, signals USFB’s intent to evolve from a niche microfinance institution into a full-spectrum financial services provider with national reach and universal banking aspirations.

 

Current Snapshot: Strong Foundation for Ambitious Growth

As of June 2025, Ujjivan’s gross loan book stood at approximately ₹33,287 crore, with a diversified presence across 26 states and union territories. The bank currently operates 752 branches, and plans to add 400 more outlets over the next five years to deepen its footprint in underserved and semi-urban markets.

 

USFB’s financial performance has been robust, with the bank reporting its highest-ever profit after tax (PAT) of ₹1,281 crore, a Return on Assets (ROA) of 3.5%, and a Return on Equity (ROE) of 26.1%. These metrics provide a strong foundation for the bank’s ambitious expansion plans.

 

Strategic Shift: From Microfinance to Secured Lending

Historically, Ujjivan’s loan book has been dominated by unsecured microfinance loans, which accounted for 73% in June 2023, dropping to 54% by June 2025. The bank now aims to invert this ratio, with secured loans—including affordable housing, gold loans, loan against property, and working capital finance—expected to comprise 65–70% of the portfolio by FY302.

 

This strategic pivot is designed to reduce volatility, improve asset quality, and align with regulatory expectations. As CEO Sanjeev Nautiyal noted, “A high level of unsecured portfolio attracts regulatory scrutiny and increases balance sheet vulnerability. We’re committed to building a more resilient and diversified loan book”.

 

Universal Banking Aspirations

In addition to its loan book expansion, USFB has applied to the Reserve Bank of India (RBI) for a voluntary transition to a universal bank, a move that would allow it to offer a broader range of services and compete more directly with commercial banks. The application, submitted in February 2025, is currently under review, with a decision expected by December 2025.

 

If approved, the transition would mark a significant milestone in USFB’s journey, unlocking new avenues for deposit mobilization, treasury operations, and corporate banking.

 

Capital Raising and Infrastructure Investment

To support its growth ambitions, USFB is planning to raise ₹2,000 crore through a Qualified Institutional Placement (QIP) within the next two years. This capital will be used to fund branch expansion, technology upgrades, and credit growth.

 

The bank is also investing heavily in digital infrastructure, including AI-driven credit scoring, mobile banking enhancements, and customer onboarding automation. These initiatives are expected to improve operational efficiency and customer experience, especially in rural and semi-urban markets.

 

Industry Perspective

A senior analyst at a leading brokerage firm commented:

 

“Ujjivan’s roadmap to ₹1 trillion is ambitious but achievable. Their pivot to secured lending and push for universal banking status are smart moves that align with macro trends in financial inclusion and regulatory stability.”

 

What to Watch

With a clear roadmap and strong financial metrics, Ujjivan Small Finance Bank is positioning itself as a formidable player in India’s evolving banking landscape.

 

Sources: The Hindu BusinessLine, ScanX News, Ujjivan Q1FY26 Investor Presentation