JANA Small Finance Bank

Stock Opportunities
22

Their universal bank license return could be the reason.

23

At current valuation it seems that the markets believe that Jana SFB is going to burn roughly 630-odd crores through losses.

  • Current Price: 349
  • Book Value: 410
  • Total Equity: (105+4175) crores
  • Price to book: 0.85x

To me, more than the return of universal banking license, it seems the lack of public appearance from the management, that is hurting them. The management has not made a single relevant stock exchange announcement post return of Universal Banking License application or media appearance since Q1 (not Q2) FY 26 results and this lack of communication combined with skepticism induced by return of universal banking license has probably sent jitters to investors maybe even including institutional ones like Amansa Holdings that recently sold off some of their holdings in Jana Bank.

For a buy and hold who is not answerable to quarterly gyrations in value to the public - this might be a good opportunity to keep buying and maybe that is why FIIs have made purchases off recently (as per an Economic times article a few days back)

And for public money managers - they are forced to sell or face temporary draw downs which could induce redemption pressure.

What is strange to me is management’s complete silence since the day they reported return of universal banking license. They probably have a very strong reason or are plainly ignorant given the high liquidity coverage ratio they have reported in recent quarters indicating they don’t need to raise money anytime soon.

Either ways, it’s all just speculation at this stage until we hear back from Management, and they being in silent phase (due to pending Q3 results) won’t say anything until 6 Feb 2026.

3 Likes
24

Q3 results a few hits and misses for me.

Misses -

  1. Inspite of accelerated provisioning consistently their regulatory provisioning are elevated eating into their PPOP.

  2. Event though the gross slippages have come down more than 25% they are high as per industry that is seen in SFBs. Typically it is 0.5%-0.75% per quarter. Their reduced gross slippages at 440 crores is more than 1.3% of their loan book. In comparision an Ujjivan Small Finance Bank has gross slippages of 221 crores in Q3 2026 with a loan book that is 10% higher and with much higher unsecured loan book is less than 0.6% of their loan book, less than half of jJANAs gross slippages this quarter.

  3. Over dependence on ARC sales to keep GNPAs and NNPAs under control. Though this is industry practice but having almost 4% of asset in Security receipts are somewhat elevated. 1332 crores gross SRs are potential risk though they are mostly secured assets per ratings given by agencies.

Hits -

  1. Secured mix improving along with the unsecured modest growth.

  2. SMA book lowest in 5-6 quarters

  3. Fresh flows to NPAs in the coming quarter which is Q4 FY 26 is lower than Q4 of 2024 a 2 year low which indicates that the microfinance issue is finally under control and best in 2 years for the bank.

  4. With 62% unsecured guaranteed by CGTMSE and CGFMU the secured book and Insured book is now 90% and just 10% which is either uninsured or unsecured making it much more resiliant book in the event of any downturn in the future.

  5. Slowly increasing book diversity with additional products like gold loan, 2 wheeler loans, used car and now credit on UPI along with micro morthage and Affordable housing. Though they still have a long way to go in product side for retail ,MSME and also corporate side.

  6. Reaching highest ever Net interest income to 675 crores and increasing PPOP for the first time in many quarters along with unsecured book rising and cost of funds getting down. Expectations of next quarter Net interest income to again reach all time highs along with improved PPOP are reasonably high.

  7. Management is very responsive and open to suggestions from investor and analyst community. E.g I suggested them to add SMA disclosures if possible and they have incorporated it in the very next quarter along with previous 4 quarters and forward quarter expectations in SMA book as well. Said that they could include more granular details taking que from other small finance banks or some other banks which could help investors and analysts get better insights of how the company is progressing.

3 Likes