Investment Thesis

A proxy to ‘self-reliant’ India theme

With a well-diversified loan portfolio and an expanding deposit base, we have emerged as a play on India’s inclusive story with economic formalisation as the key driver. Our strong balance sheet, robust liquidity and capital adequacy make us resilient to macro challenges and enable us to chart our next leg of growth.

Vast Untapped Opportunity Landscape

India has a large economically active but unbanked and underbanked population segment. According to industry estimates, assets under management at Small Finance Banks (SFBs) are likely to grow at a CAGR of 25% over 2019-25 to `1,833 billion; deposits are likely to grow at a CAGR of 60-65% to `2,272-2,492 billion over the same period.

Source - CRISIL report

ESFB has the largest number of Banking Outlets among SFBs

ESFB is the second largest SFB in terms of AUM and total deposits

Source - CRISIL report

Well-diversified Loan Book De-risks Growth

Over the years, we have strategically reduced our exposure to the microfinance segment and focused on secured lending with quality underlying collaterals. With the government’s clarion call for building a ‘self-reliant’ India, there will be renewed focus on strengthening micro, small and medium enterprises, which are considered the backbone of the economy.

Top 3 Segments by AUM (%)

Expanding Deposit Base – a Source of Stable Low-cost Funding

With our compressive suite of products targeted at mass and mass affluent segments, we have significantly increased our deposit. Further, we are driving inclusive banking by converting our microfinance and asset customers to account holders, which is further expanding our penetration and increasing customer stickiness.

Top 2 Funding Source (%)

Stable Asset Quality and Improving Return Ratios

Despite a challenging environment for the banking industry as a whole, we have been able to maintain our asset quality at comfortable levels and have steadily improved our return ratios.

Asset Quality Trends (%)

Return Ratio Trends (%)

Robust Capitalisation Provides Resilience to Economic Cycles

Our prudent approach to lending, innovative underwriting methods and focus on corporate governance have enabled us to build adequate capital buffer to withstand external shocks. Our Liquidity Coverage Ratio (LCR) at 133.2% also stands ahead of the minimum LCR requirement of 90%.


Capitalisation Ratios


Minimum Requirement




CRAR – Tier I



CRAR – Tier II