Equitas Small Finance Bank Shares Crash 17% To 52-Week Low, Stock Plunges Over 27% In Two Days After CEO Resignation

Mumbai: Equitas Small Finance Bank shares plunged more than 17% on Friday, extending their sharp decline for the second consecutive session following Managing Director and CEO P N Vasudevan's resignation announcement amid concerns over a perceived conflict of interest. The steep fall pushed the stock to a fresh 52-week low, raising investor concerns about leadership uncertainty and corporate governance.

Sharp Decline

At around 10.45 am, Equitas Small Finance Bank shares were trading 17.07% lower at ₹47.26 on the BSE. The stock has declined approximately 27.34% in two trading sessions, compared with Wednesday's closing price of ₹65.05. The selling pressure intensified after Vasudevan announced his decision to step down following repeated concerns raised by investors.

Resignation Reasons

Vasudevan's resignation comes amid questions surrounding his daughter Varshini Vasudevan Pathangi's involvement in another financial services business. She founded Unico Housing Finance, an unlisted non-banking financial company (NBFC), in 2023.

According to Vasudevan, investors had repeatedly highlighted the relationship as a potential concern, affecting market sentiment towards the bank. However, he maintained that the arrangement had already been disclosed to the board and the Reserve Bank of India (RBI), and that no actual conflict existed.

Leadership Transition

Vasudevan has been associated with Equitas since its establishment as a microfinance institution in 2007 and oversaw its transformation into a small finance bank in 2016. The bank's board has requested him to continue until a successor is appointed. Its nomination and remuneration committee will evaluate internal and external candidates for the leadership position.

Previous Attempt

This is not Vasudevan's first attempt to leave the organisation. In 2022, he proposed stepping down to pursue philanthropic activities but subsequently withdrew his resignation following the board's request.

Regulatory Scrutiny

Earlier this year, the RBI reportedly sought clarification regarding the relationship between Equitas and Unico Housing Finance. In August, Equitas disclosed that it had undertaken only one deposit transaction with Unico, with no additional dealings reported until then. The bank's leadership transition and regulatory developments are likely to remain important factors influencing investor sentiment.