ESAF Small Finance Bank shares jump 10% after selling ₹735 crore bad loans to an ARC

Shares of Thrissur-based ESAF Small Finance Bank Limited. gained as much as 11% on Thursday, June 19, after its board of directors approved the sale of a pool of non-performing and technically written-off loans worth ₹735.18 crore to an asset reconstruction company (ARC).

The announcement was made by the company after market hours on Wednesday.

The loan pool comprises ₹362.43 crore in NPAs and ₹372.75 crore in technically written-off accounts. The bank said it holds provisions covering 90.15% of the total pool.

The board has authorised the Asset Sale Committee of Executives to carry out the necessary procedures to complete the transaction. The name of the ARC and the terms of the sale were not disclosed.

This week, Maruti Suzuki India said it has partnered with ESAF Small Finance Bank to offer retail financing solutions for new cars, used cars, and commercial vehicles.

The two partners have signed a memorandum of understanding for the purpose, which will focus on offering easy and flexible finance options tailored especially for first-time buyers, the company said in a statement.

The partnership will leverage the combined network of Maruti Suzuki and ESAF SFB across tier-II and tier-III cities to make vehicle ownership more accessible and convenient for a wider segment of customers, it added.

Shares of ESAF Small Finance Bank are trading 8.9% higher on Thursday at ₹33.09. The stock has declined 22% so far in 2025.