SBFC Finance Allots 2,66,519 Equity Shares to Employees Under Various ESOP Schemes

SBFC Finance Limited allotted 2,66,519 equity shares to its employees on 13th May, 2026, following the exercise of stock options under four of its employee stock option schemes. The allotment was carried out pursuant to the approval of the Stakeholders Relationship Committee and disclosed to the stock exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Scheme-wise Allotment Breakdown

The total allotment of 2,66,519 equity shares was distributed across four ESOP schemes, each carrying a face value of Rs. 10/- per share. The exercise prices varied across schemes, reflecting the different grant periods. The following table details the scheme-wise allotment:

Scheme: Exercise Price Shares Allotted SBFC Stock Option Policy 2021-II Rs. 40/- each 55,499 SBFC Stock Option Policy 2021-III – Special Grant Rs. 40/- each 47,567 SBFC Stock Option Policy 2023-I Rs. 55/- each 46,751 SBFC Stock Option Policy 2023-III Rs. 87.33/- each 1,16,702 Total 2,66,519

All equity shares allotted under the four schemes rank pari-passu with the existing equity shares of the company in all respects.

Impact on Share Capital

As a result of this allotment, the issued and paid-up equity share capital of SBFC Finance Limited has increased as follows:

Parameter: Before Allotment After Allotment Number of Equity Shares: 1,10,64,14,229 1,10,66,80,748 Share Capital (Rs.): Rs. 11,06,41,42,290/- Rs. 11,06,68,07,480/-

Scheme-wise Regulatory Disclosures

In compliance with Regulation 10(c) of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, SBFC Finance provided detailed disclosures for each scheme. The key parameters for each scheme are summarised below:

Scheme: Shares Issued Exercise Price Premium Per Share Total Issued Shares After Issue Total Issued Share Capital After Issue SBFC Stock Option Policy 2021-II 55,499 Rs. 40/- Rs. 30/- 1,10,64,69,728 Rs. 11,06,46,97,280/- SBFC Stock Option Policy 2021-III – Special Grant 47,567 Rs. 40/- Rs. 30/- 1,10,65,17,295 Rs. 11,06,51,72,950/- SBFC Stock Option Policy 2023-I 46,751 Rs. 55/- Rs. 45/- 1,10,65,64,046 Rs. 11,06,56,40,460/- SBFC Stock Option Policy 2023-III 1,16,702 Rs. 87.33/- Rs. 77.33/- 1,10,66,80,748 Rs. 11,06,68,07,480/-

The filing statements for SBFC Stock Option Policy 2021-II, 2021-III – Special Grant, and 2023-I were filed with the stock exchanges on 12th September, 2023, while the filing for SBFC Stock Option Policy 2023-III was made on 1st April, 2024. None of the allotted shares carry any lock-in restrictions. The disclosure was signed by Narayan Barasia, Chief Financial Officer of SBFC Finance Limited.

SBFC Finance held its Q4 FY26 Earnings Conference Call on April 27, 2026, with the senior management team—including Executive Vice-Chairman Aseem Dhru, MD & CEO Mahesh Dayani, CFO Narayan Barasia, Chief Strategy Officer Sanket Agrawal, and Chief Risk Officer Rajiv Thakker—presenting the company's financial results and strategic outlook. The call was moderated by Renish Bhuva of ICICI Securities.

Financial Performance: Strong Growth Across Key Metrics

SBFC Finance delivered a robust set of numbers for Q4 FY26, with broad-based growth across AUM, profitability, and asset quality. The following table summarises the key financial metrics for the quarter and full year:

Metric: Q4 FY26 YoY Change QoQ Change Total AUM: ₹11,270 crores +29% +8% MSME AUM: ₹8,873 crores +22% +4% Gold Loan AUM: ₹2,374 crores +63% +22% PAT (Quarter): ₹123 crores +30% +4% PAT (Full Year): ₹451 crores +31% — Yield: 17.61% — — Cost of Borrowing: 8.52% -83 bps YoY — Spread: 9.09% +56 bps YoY +5 bps QoQ Opex: 3.93% -69 bps YoY ~Flat QoQ GNPA: 2.61% -13 bps YoY -10 bps QoQ PCR: 41.64% — — Credit Cost: 1.38% — — CRAR: 32.8% — — Return on Avg. AUM: 4.57% — — Return on Avg. Tangible Equity: 14.48% — — Tangible Net Worth: ₹3,465 crores — —

MSME disbursements for the quarter stood at ₹785 crores. The company added 21 branches during the quarter, bringing the total branch count to 251 as of March 2026. The book remains 100% secured, either by property or gold.

Cost Efficiency and Capital Position

Management highlighted significant improvements in cost metrics over the year. Compared to end of FY25, cost of funds declined by 48 basis points, cost of operations fell by 46 basis points, and cost of credit increased by 30 basis points. Cumulatively over three years since listing, the company delivered a 161-basis-point reduction in opex against a guided target of 150 basis points. The company's ECL provisioning stands at 1.84%, which is 2.1x the IRAC norms used by banks. With a CRAR of 32.8% and a debt-to-equity leverage of 1.9, management indicated that the company has sufficient capital to grow AUM to approximately ₹18,000 crores to ₹19,000 crores before needing to access markets, which they estimate is at least two years away.

Strategic Outlook and Growth Guidance

Management reiterated its quarterly AUM growth guidance of 5% to 7%, noting that the company grew above 7.5% in Q4 FY26 and 29% on a full-year basis. The total addressable market was estimated at approximately INR 4 lakh crores. Key strategic priorities include:

Branch expansion: Stabilising at 275 branches during FY27 to consolidate recent investments before further scaling

Portfolio mix: Maintaining MSME and gold loan mix at approximately 75% and 25% respectively, with gold potentially moving closer to 25% given new branch additions

Co-origination: Expected to remain at 18% to 19% of AUM through FY27

Opex reduction: Targeting a further 20 to 25 basis points decline through the year

Average ticket size: Continuing to remain below INR 2.5 lakhs

Loan-to-value on gold: Conservatively maintained below 60%, closer to 56% to 57%

Management noted that pre-provision operating profit (PPOP) grew by approximately 37% in FY26, driven by efficiency gains in finance cost and opex, even as AUM grew at 28% to 29%.

Asset Quality and Risk Management

GNPA improved to 2.61%, down 10 basis points QoQ and 13 basis points YoY. Management guided credit costs to remain range-bound at approximately 1.38%, with potential marginal benefits of 5 basis points. Stage 2 provisions were strengthened during the year, with stage 2 moving from approximately 6% to 16%. An annual refresh of the PD/LGD model resulted in inter-stage adjustments—over-provisioning in stages 1 and 3 was corrected against under-provisioning in stage 2—with no net impact on overall provisions. On risk management, the company highlighted the rollout of a multilingual app for standardising credit manager personal discussions, branch-level risk rating introduced over the last 6 to 7 months, and tightened fraud risk filters across distributed branches.

Distribution Strategy and Market Penetration

Management emphasised that SBFC Finance is present in only approximately 30% of districts within its operating states, and within those districts, penetration remains limited. The company operates across 15 states and follows a direct sourcing model, with no immediate plans to engage DSAs or connectors. Approximately three-fourths of customers borrow against their property for the first time. The hub-and-spoke cluster model—with a senior supervisor managing 5 to 6 branches within a 30-kilometre radius—guides branch expansion decisions, supported by quarterly bureau score refreshes at the pin code level. Management indicated that approximately 60% of branches are more than 3 years old, with an average AUM of ₹66 crores and above, reflecting the maturity of the distribution network. Gold loan branches account for close to 220 out of 251 total branches.

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