New Delhi, Oct 30 — Equitas Small Finance Bank shares on Friday crashed 17 per cent on Friday, extending their two-day fall after CEO P N Vasudevan said he would resign amid conflict-of-interest concerns as his daughter runs a non-banking finance company.
At around 10:45 am, the company’s shares were trading 17.07 per cent lower, hitting a new 52-week low of Rs 47.26 on the BSE. Moreover, the stock has declined 27.34 per cent in two sessions against Wednesday's closing of Rs 65.05.
Vasudevan -- who has led the lender as Managing Director and CEO for over a decade -- said in his resignation letter that investors had repeatedly raised the issue and that it was weighing on the stock.
Vasudevan has led Equitas since it started off as a microfinance institution in 2007 and oversaw its conversion to a small finance bank in 2016.
His daughter, Varshini Vasudevan Pathangi, founded Unico Housing Finance, an unlisted NBFC in 2023.
The arrangement had been disclosed to the board and the Reserve Bank of India, and there was no conflict of interest, Vasudevan said in his resignation letter.
"Sometimes perceptions are stronger than reality," Vasudevan said
Investors had told him the overhang was causing the shares to underperform, according to him.
On Thursday, the board said it has asked Vasudevan to stay on until a successor is found and has asked its nomination and remuneration committee to identify internal and external candidates.
However, this is not the first time Vasudevan has tried to move out. In 2022, he planned to step down to pursue philanthropic activities but withdrew the resignation after the board asked him to continue.
The Reserve Bank of India had earlier this year reached out to the board and top management to understand the relationship between the lender and Unico, according to media reports.
Equitas said in August it had made only one deposit deal with Unico and no other transactions had been made until then.