AU Small Finance Bank Limited (AUBANK) share price
₹993.40 on NSE as of 2026-10-07. -3.37% on the day. market cap ₹74,403 Cr. P/E 26.0. 52-week range ₹724.55 to ₹1128.60. Financial Services.
What the company does
Limited) was incorporated in 1996 as a non-banking finance company (NBFC) and started the vehicle lending business in 2003 as a franchisee originator for HDFC Bank under ‘Channel Business’ and later moved to lend on its own books since 2007. Over the years, the company forayed in MSME, housing loans, and structured financing and other types of vehicle financing. The company received the license of SFB from the RBI in December 2016 and commenced banking operations from April 2017; it received the status of scheduled commercial bank (SCB) in November 2017. Post becoming an SFB, it expanded its product portfolio and geographical footprint. Fincare was merged with AUSFB effective from April 01, 2024.
Filed by CARE Ratings, page 4.
AU Small Finance Bank Q1 FY27: ₹796 Crore Profit, ₹9 Crore of Treasury, and a Bank That Keeps Saying "AI"
At a glance
AU Small Finance Bank takes deposits from savers and lends the money on, largely to small borrowers.
Net profit in the three months to June 2026 was ₹796 crore, against ₹581 crore a year earlier. That is a rise of 37 per cent. Revenue reached ₹5,303 crore against ₹4,378 crore. In the three months to March 2026, profit had been ₹832 crore.
The mix underneath the headline moved sharply. Net interest income — what a bank earns on loans after paying its depositors — rose 32 per cent to ₹2,695 crore. Core other income rose 33 per cent to ₹680 crore. Total other income fell 15 per cent to ₹689 crore. The bank attributes that fall to higher treasury gains a year earlier, arising from RBI liquidity operations. Treasury, the desk that invests the bank's own money, brought in ₹9 crore against ₹300 crore.
Bad loans were a smaller share of the book than a year earlier. Gross non-performing assets, meaning loans where repayment has stopped, were 2.10 per cent against 2.47 per cent. Net non-performing assets were 0.76 per cent against 0.88 per cent. Slippages, the loans that turned bad during the quarter, were ₹798 crore against ₹1,027 crore. In the preceding quarter, gross non-performing assets were 2.03 per cent and slippages ₹659 crore. Credit cost including the CGFMU premium was 0.8 per cent against 1.4 per cent. Provisions of ₹371 crore include a one-off ₹23 crore, from what the bank describes as a strengthening of provisioning policy. That covers microfinance, personal and business loans, EEFI and two-wheelers.
Deposits reached ₹1,57,727 crore, up 24 per cent. The gross loan portfolio stood at ₹1,44,250 crore, up 23 per cent. The market pays ₹27.40 for every ₹1 of yearly profit. The bank is valued at ₹78,078 crore and reports return on equity of 14.3 per cent. Its gold loan book grew 130 per cent over the year.
Introduction
AU Small Finance Bank Limited provides retail banking, wholesale banking, treasury operations and other services. It began in 1996 as a vehicle financier in Rajasthan, lending against trucks and cars. It started operating as a small finance bank in 2017. In 2021 it launched a digital bank, video banking and credit cards. It acquired Fincare Small Finance Bank in 2024. By June 2026 it ran 2,920 touchpoints across 21 states and four union territories. Those reached 521 districts and included 778 ATMs. The bank serves over 125 lakh customers.
The larger structural item is the licence. The bank applied to the Reserve Bank of India in September 2024 to become a universal bank, which carries fewer restrictions than a small finance licence. In-principle approval came on 7 August 2025 and is valid for eighteen months. That approval originally required promoter and promoter-group shares to be transferred to a non-operating financial holding company. Such a company owns the bank on the promoter's behalf and does no business itself. By an RBI letter dated 6 March 2026, the requirement was replaced. The condition now applies to the transitioned universal bank only if the bank or its promoter proposes to establish a group entity in future. The final application went in during March 2026. The licence remains subject to the RBI's assessment of compliance.
Other developments have come at a steady clip. In December 2025 the foreign investment limit was raised from 49 per cent to the maximum permitted 74 per cent. In May 2026 the RBI approved Kotak Mahindra Bank acquiring up to 9.99 per cent of the paid-up capital. In February 2026 the RBI approved the reappointment of Sanjay Agarwal as managing director and chief executive. That term runs three years from April 2026.
Also in February 2026, the bank issued a clarification on media reports about Haryana government de-empanelment instructions. It stated that deposits fell from roughly ₹735 crore to ₹538 crore. It added that an internal review found no fraud.
The board and senior management have changed as well. Deputy chief executive Rajeev Yadav resigned in October 2025. Vivek Tripathi was approved as whole-time director in April 2026. Amol Padhye was appointed chief risk officer designate, effective September 2026. On 25 July 2026, chief operating officer Yogesh Jain was elevated to deputy chief executive.
Business model
The bank gathers deposits in cities and lends the money in villages. It prints the evidence itself: 83 per cent of deposits come from urban markets. Meanwhile 62 per cent of the loan book goes into core markets, the smaller rural and semi-urban centres built around farming and small business. Money is raised where it costs least and lent where it earns most, which is roughly what a bank is supposed to do.
The lending side is a full hardware store. Retail secured assets, covering vehicles, mortgages and gold loans, stand at ₹96,485 crore at a yield of 14.2 per cent. Yield here means the interest rate the bank earns on those loans. Commercial banking is ₹32,789 crore at 10.3 per cent. Inclusive banking, mostly microfinance, is ₹7,488 crore at 25.2 per cent. Digital unsecured, meaning credit cards and personal loans, is ₹3,145 crore at 14.5 per cent. Others come to ₹4,343 crore at 7.9 per cent.
The microfinance book is 5 per cent of the portfolio and earns nearly double the yield of anything else. Management says microfinance is not run as a return maximiser, but for priority sector lending and inclusion. Priority sector lending is the quota the RBI sets for credit to farming and small business. The bank says 96 per cent of that book is covered under CGFMU, a government guarantee scheme. As the chief executive put it, instead of building buffers they are buying protection.
Within the vehicles book sit ₹23,427 crore of commercial vehicles, taxis and three-wheelers. Cars and two-wheelers account for ₹19,511 crore, and tractor finance for ₹5,681 crore. Renewable energy funding grew 123 per cent to ₹3,052 crore from a small base. Gold loans grew 130 per cent to ₹4,547 crore. The average gold loan is ₹2.5 lakh and more than 80 per cent of it is rural. The internal rate of return on that book is around 15.5 per cent, and it is now distributed through more than 1,300 branches.
The deposit franchise has been reorganised into four verticals, with the enthusiasm of a company that has recently discovered org charts. Branch banking supplies 60 per cent, and government and interbank business 21 per cent. Financial institutions supply 8 per cent and commercial customers 7 per cent. The current and savings account ratio, the share of deposits held in low-interest accounts, is 29 per cent. Stable deposits are 79 per cent, counting those accounts plus retail term deposits and non-callable bulk money.
The product bouquet includes insurance from 16 partners, mutual funds, portfolio management and property trusts. It also covers share-issue applications, GIFT City investments and Fastag. There is a new retail remittance product carrying no foreign exchange margin, which the bank calls a first among Indian private sector banks.
Quarterly results, balance sheet, cash flow, ratios, shareholding and the filings themselves are on the full page for AU Small Finance Bank Limited.
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