Ujjivan eyes universal bank nod by December, plans Rs 2,000 crore QIP in 24 months

Ujjivan Small Finance Bank (SFB) expects clarity on its universal banking licence application by December this year. The bank also plans to raise around Rs 2,000 crore through a qualified institutional placement (QIP) over the next 18–24 months to support growth, says Sanjeev Nautiyal, MD and CEO, Ujjivan Small Finance Bank.

The bank confirmed that its application, filed in February, has gone through multiple rounds of clarifications with the central bank and is now in an advanced stage of processing. “We remain hopeful looking at our credibility, integrity and track record,” Nautiyal said, while underlining that the plan to expand remains unchanged regardless of the outcome.

The management stressed that its five-year roadmap is independent of the RBI’s decision, though a conversion into a universal bank would open more doors and opportunities for the lender.

On the growth side, Ujjivan reiterated its commitment to business and microfinance loans, highlighting that its underwriting, customer selection and collection mechanisms have left its book healthier than the industry during recent headwinds.

The management also clarified that its capital-raising plans are tied to its broader balance sheet goal of achieving a Rs 1 lakh crore gross loan book by 2030. “This 2,000 crore is part of our strategic plan and is irrespective of the RBI’s decision,” they said.

The bank is simultaneously stepping up its technology investments. It currently spends about Rs 200 crore annually on IT, three-fourths on running operations and a fourth on new initiatives but expects to scale this up to nearly Rs 500 crore over the next five years.

Retail lending remains the mainstay, accounting for over 90% of the balance sheet, with a deliberate shift towards secured loans. The share of secured assets has risen from 30% in March 2024 to 46% by June, and is projected to climb to 65–70% by FY30. This diversification, management noted, would bring stability, reduce volatility, and enhance earnings visibility.

On the microfinance portfolio, Ujjivan acknowledged the stress the sector faced in the past decade but said delinquencies have peaked across most states, and recovery is underway. “The pains are already behind us… growth is around the corner,” Nautiyal added.

Looking ahead, Ujjivan maintains that a universal bank licence would be an optimal outcome to execute its strategy faster and make its brand more competitive, but the focus on grassroots MSMEs, retail borrowers, and technology-led growth will continue irrespective of regulatory decisions.