Vasudevan clarified in an October 29 letter that his actions fully complied with banking regulations, noting the only past tie to his daughter's NBFC was a single short-term deposit repaid roughly 2.5 years ago. Even so, he chose to step down after investor feedback indicated the perceived conflict was weighing heavily on the bank's market valuation. Domestic brokerage JM Financial maintained an "Add" rating while lowering its target price to Rs 65, noting that the board plans to finalize the succession process within three to four months.
Key points
The chief executive opted to step down to remove a persistent overhang caused by his daug…: The chief executive opted to step down to remove a persistent overhang caused by his daughter co-promoting an RBI-licensed NBFC.
The bank's board aims to conclude the leadership succession and secure regulatory approva…: The bank's board aims to conclude the leadership succession and secure regulatory approval within three to four months.
Analysts flag asset quality performance and high reliance on insurance distribution incom…: Analysts flag asset quality performance and high reliance on insurance distribution income as critical metrics to monitor alongside the transition.
Sources checked by our analysis pipeline: 1
While announcing the company’s Q2 results on Thursday, the lender also announced that it has received a letter from Vasudevan, conveying his intention to step down from his position to pursue certain personal and social initiatives. The shares of the company tumbled 12% after the announcement to close at Rs 57.17 apiece.
Also read | Equitas Small Finance Bank chief PN Vasudevan plans exit over perceived conflict involving daughter's NBFC
The stock is today extending losses, falling another 17% to trade at Rs 47.32 apiece. The company's shares have fallen more than 27% in just two consecutive sessions, wiping off more than Rs 2,000 crore or 27% of its market capitalisation to push it below Rs 5,415 crore.
What Equitas SFB CEO said in his resignation letter?
Equitas CEO and MD PN Vasudevan in his letter dated October 29 explained the reason for his decision to exit the company. He said his daughter is the co-promoter of an NBFC which received its licence from the RBI in 2023. “My being the MD of a bank and my daughter being the…
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