Equitas Small Finance Bank shares jump 9% after Balaji Nuthalapadi’s appointment as interim CEO

ET Online

According to a filing with the exchange, the bank said that based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors approved the appointment of Balaji Nuthalapadi as the Interim CEO of the bank, subject to approval from the Reserve Bank of India (RBI). Nuthalapadi currently serves as the Whole-Time Director (Executive Director) of the bank.

The bank further said that the appointment of Nuthalapadi as interim CEO, consequent to the resignation of P. N. Vasudevan as the MD & CEO, shall take effect from the date of RBI approval or such other date as the RBI stipulates.

Also Read | Equitas Small Finance Bank names Balaji Nuthalapadi interim CEO following PN Vasudevan's resignation

The bank further said that the board placed on record its deep appreciation and sincere thanks to P. N. Vasudevan for his invaluable contributions, exemplary leadership, and dedicated service to the bank during his tenure as MD & CEO. Upon receipt of RBI approval for the appointment of the Interim CEO, the board will decide his relieving date in consultation with Vasudevan.

The board has also initiated the process of identifying a successor to P. N. Vasudevan and will submit its recommendation to the RBI as per the applicable regulations.

On October 30, 2026, the shares of Equitas Small Finance Bank tanked over 17% to extend losses to a whopping 27% in just two sessions after its CEO and founder PN Vasudevan announced sudden resignation plans amid concerns over a perceived conflict of interest related to his daughter’s NBFC.

While announcing the company’s Q2 results on October 29, the lender also announced that it has received a letter from Vasudevan, conveying his intention to step down from his position to pursue certain personal and social initiatives. The shares of the company tumbled 12% after the announcement to close at Rs 57.17 apiece.

The stock is on October 30 extended losses, falling another 17% to trade at Rs 47.32 apiece. The shares of the company fell more than 27% in just two consecutive sessions, wiping off more than Rs 2,000 crore or 27% of its market capitalisation to push it below Rs 5,415 crore.

What Equitas SFB CEO said in his resignation letter?

Equitas CEO and MD PN Vasudevan explained the reason for his decision to exit the company in his letter dated October 29. He said his daughter is the co-promoter of an NBFC which has received its licence from the RBI in 2023. “My being the MD of a bank and my daughter being the co-promoter of an NBFC are within the regulatory framework of the Banking Regulations Act,” he noted.

In his investor meeting over the past three years, Vasudevan said he has been repeatedly asked about the perceived conflict of interest. He said in reality, there is no conflict of interest, since there is no transaction at all between the bank and the said NBFC, except one short term deposit about 2.5 years back, which was duly repaid on maturity. According to the executive, there are no other transactions including any loans by the bank to the NBFC.

"In spite of my explaining the above to investors, the perception of conflict continues to persist. I am told by investors that this ‘overhang’ is causing the stock to underperform, impacting value creation for both shareholders and employees. Sometimes perceptions are stronger than reality,” he wrote.

Also Read | Equitas SFB shares tumble 27% in 2 days on CEO exit. More pain ahead?

Vasudevan said it is important to remove what he called the ‘overhang’ arising out of the perception issue. “Accordingly, I would like to step down from the bank. I am sure that with this ‘overhang’ removed,the stock should reflect the financial strength of the bank, benefiting all stakeholders including employees,” he wrote.

Equitas Small Finance Bank share price

In the last one month, the stock went down 17.79% and nearly 12.15% in the current calendar year so far. In the last one year, the stock went down 6.96%. The stock was down 42.49% in the last three years and nearly 14.01% in the last five years.

Disclosure: This article has been written by Surbhi Khanna, who is not a SEBI-registered Research Analyst or an investment advisor . Surbhi Khanna does not hold any financial interest in Economic Times as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of the EconomicTimes Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment.