Equitas SFB Share Price Crash: Stock Falls 35% in 2 Days After CEO P N Vasudevan Resigns

Shares of Equitas Small Finance Bank (Equitas SFB) came under intense selling pressure on Friday, October 30, even as the broader Indian stock market traded in positive territory. The bank’s stock fell around 15% during the session, extending its reported two-day decline to approximately 35%, after longtime Managing Director and CEO P N Vasudevan announced his resignation.

The sharp correction followed concerns among investors over a perceived conflict of interest involving Vasudevan’s daughter and an NBFC. The development has raised questions about leadership continuity and corporate governance, overshadowing the bank’s recent strong quarterly performance.

According to Moneycontrol, Equitas SFB shares were trading around ₹48.50, down 15%, at approximately 10:10 am on October 30. The stock’s decline followed a fall of more than 12% in the previous session. Intraday reports from different outlets recorded varying levels of losses as the stock continued to move sharply.

Why Are Equitas SFB Shares Falling?

The immediate trigger for the decline is the resignation of P N Vasudevan, who has led Equitas since its early days as a microfinance institution in 2007.

Vasudevan said in his resignation letter that investors had repeatedly raised questions about a perceived conflict of interest because his daughter, Varshini Vasudevan Pathangi, founded Unico Housing Finance, an unlisted non-banking financial company, in 2023.

According to Vasudevan, the issue had continued to create uncertainty among investors and was weighing on the bank’s share price. He believed that stepping down could remove this overhang and allow the market to assess the bank’s financial performance independently.

The resignation has therefore triggered concerns about the bank’s leadership transition, even though the bank recently reported its highest-ever quarterly profit.

What Did P N Vasudevan Say About the Conflict-of-Interest Concerns?

In his resignation letter, Vasudevan maintained that there was no conflict of interest between Equitas Small Finance Bank and Unico Housing Finance.

He stated that the relationship had been disclosed to the bank’s board and the Reserve Bank of India (RBI) as required. He also said that there had been no transactions between the two entities, apart from one short-term deposit placed approximately two-and-a-half years ago and repaid on maturity.

Vasudevan said investors had repeatedly questioned him about the matter during meetings over the past three years. Despite his explanations, the perception continued to affect sentiment towards the bank.

He indicated that removing this perceived conflict-related overhang was important for shareholder and employee value creation.

Importantly, the concerns relate to a perceived conflict of interest; Vasudevan has denied that an actual conflict existed. The resignation should not be interpreted as proof of wrongdoing by either the bank or the NBFC.

Who Is P N Vasudevan and What Is His Role at Equitas SFB?

P N Vasudevan has been associated with Equitas since its establishment as a microfinance institution in 2007. He played a key role in expanding the organisation and overseeing its transition into a small finance bank in 2016.

Under his leadership, Equitas developed into a lender serving customers across underserved and underbanked segments.

The bank’s board has taken note of his resignation and requested him to continue as Managing Director and CEO until a successor is appointed. Its nomination and remuneration committee has been tasked with identifying suitable internal and external candidates.

The appointment of a new chief executive will be subject to the applicable regulatory approvals, including approval from the RBI.

Equitas SFB Reports Record Q2 Profit

The sharp fall in the share price comes despite a strong performance in the September 2026 quarter.

Equitas Small Finance Bank reported its highest-ever quarterly net profit of ₹218 crore in Q2 FY27, representing an increase of more than eight times compared with the ₹24 crore reported in the corresponding quarter last year.

The bank also said its total business crossed ₹1 lakh crore during the September quarter.

The results highlight the contrast between the lender’s operating performance and the negative market sentiment following the CEO’s resignation. However, investors are likely to monitor whether the leadership transition affects the bank’s growth plans, business execution and future performance.