ESAF Small Finance Shares Rise Over 11% On Nod To Sell Rs 735-Crore Bad Loan

Shares of ESAF Small Finance Bank Ltd. rose over 11% on Thursday after its board of directors approved the sale bad loans worth Rs 735 crore. In addition, the shares were trading at a high volume.

The Thrissur-based company has written off loans worth Rs 735.18 crore to an asset reconstruction company, according to an exchange filing on Wednesday. The loan pool consists of Rs 362.43 crore in NPAs and Rs 372.75 crore in technically written-off accounts. According to the bank, it holds provisions covering 90.15% of the total pool.

The bank did not specify the type of loans being sold.

Earlier this week, Maruti Suzuki India Ltd. 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.

Earlier this year, Hinduja Group's flagship company, Ashok Leyland Ltd. has also signed a Memorandum of Understanding with ESAF Small Finance Bank to offer financing solutions to its customers.

Shares of ESAF Small Finance Bank rose as much as 11.40% to Rs 34 apiece, the highest level since June 11. They pared gains to trade 7.47% higher at Rs 32.80 apiece, as of 9:28 a.m. This compares to a 0.01% advance in the NSE Nifty 50.

This comes after the company declined for the last seven sessions.

It has fallen 42.07% in the last 12 months and 22.25% year-to-date. Total traded volume so far in the day stood at 25 times its 30-day average. The relative strength index was at 54.71.