Shares of Equitas Small Finance Bank crashed nearly 20 per cent to hit the lower circuit at Rs 52.11 on Thursday, October 29, after the Chennai-based lender disclosed that its founder and Managing Director & CEO, P.N. Vasudevan, has resigned, even as the bank reported its highest-ever quarterly net profit of Rs 218 crore for the quarter ended September 30, 2026. The stock opened at Rs 66, touched a high of Rs 69.70 and then plunged, wiping out nearly Rs 1,500 crore in market capitalisation as traded volumes surged to 655 lakh shares.

Source: The Hindu BusinessLine

Vasudevan, who has led Equitas since its inception as a microfinance institution in 2007 and steered its transition into a Small Finance Bank in 2016, said in his resignation letter to Part-Time Chairman Anil Kumar Sharma that he was stepping down to remove a 'perception overhang' around a potential conflict of interest. His daughter is a co-promoter of an NBFC that received an RBI licence in 2023; BusinessLine reported that she co-founded Unico Housing Finance. Vasudevan maintained that no financial transactions occurred between the bank and the NBFC, except for a short-term deposit roughly two and a half years ago that was repaid at maturity, but acknowledged that investor concerns about the perceived conflict had weighed on the stock.

At its meeting on October 29, the bank's Board of Directors noted the resignation and agreed to it, according to the bank's regulatory filing. Vasudevan has agreed to continue as MD & CEO until a successor is in place. The Board has directed the Nomination and Remuneration Committee to identify candidates from within and outside the bank, and any appointment will require approval from the Reserve Bank of India (RBI).

Source: Equitas SFB regulatory filing via Tulsian

-20%Share price fall to lower circuit at Rs 52.11 on October 29
Rs 218 croreRecord quarterly net profit, Q2 FY27
Rs 1 lakh crore+Total business (advances + deposits) crossed in the quarter
2.29%Gross NPA ratio, improved from 2.92% a year ago

On the financial side, the bank's results for the half year ended September 30, 2026 showed a net profit of Rs 401.6 crore, a sharp turnaround from a net loss of Rs 199.6 crore in the same period last year. Total income for the September quarter rose to Rs 2,357.5 crore from Rs 1,846.3 crore a year earlier, the gross NPA ratio improved to 2.29 per cent from 2.92 per cent, and total business crossed Rs 1 lakh crore during the quarter.

BusinessLine reported that reports suggest the RBI initiated an inquiry into the bank earlier this year and questioned board members on whether they were fully aware of the relationship when extending Vasudevan's tenure. The bank said it does not expect any impact on its long-term vision from the leadership change.