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

Equitas Small Finance Bank shares experienced a dramatic 17% drop on Friday, plunging to their lowest point in 52 weeks and falling over 27% within just two days. The severe decline was triggered by the resignation of Managing Director and CEO P N Vasudevan amid allegations of a conflict of interest. The stock's value fell to ₹47.26 on the BSE after closing at ₹65.05 the previous day, reflecting an investor concern over leadership instability and governance issues.

Trading halted at around 10.45 am, Equitas Small Finance Bank shares had plummeted 17.07% to ₹47.26, marking a 27.34% decrease over the previous two trading sessions.

Vasudevan's resignation followed persistent investor concerns about the potential conflict arising from his daughter's business ventures. Varshini Vasudevan Pathangi established Unico Housing Finance, an unlisted non-banking financial company (NBFC), in 2023. The CEO explained that investors had repeatedly raised this issue, but insisted there was no actual conflict of interest, clarifying that all disclosures had been made to the board and the Reserve Bank of India (RBI).

Despite this, the board requested Vasudevan's continued presence until a successor was appointed, with the nomination and remuneration committee set to evaluate potential internal and external candidates for the position.

Vasudevan's tenure with Equitas began when the bank was founded as a microfinance institution in 2007, and he led its evolution into a small finance bank in 2016. The bank's management is seeking a replacement for Vasudevan, with a review process involving both internal and external candidates. This leadership transition, combined with regulatory scrutiny over the relationship between Equitas and Unico Housing Finance, is expected to significantly impact investor sentiment in the near future.