Jana Small Finance Bank's NCDs and Fixed Deposits Reaffirmed at 'IND A'/Stable by India Ratings
India Ratings affirmed Jana Small Finance Bank's NCDs and FDs at 'IND A'/Stable due to diversified portfolio and adequate capital, despite holding company refinancing risks and deposit challenges.
The affirmation of credit ratings at 'IND A'/Stable provides stability and confidence regarding the bank's creditworthiness. However, the identified weaknesses, particularly the refinancing risk at holding companies and deposit challenges, present ongoing monitorables that could affect future performance and warrant a medium impact.
The rating affirmation with a 'Stable' outlook reflects the bank's strengths like a diversified and secured loan portfolio, adequate capital, and profitability. However, the rating remains constrained by high refinancing risks at holding companies and challenges in mobilizing low-cost deposits, leading to a neutral overall sentiment.
India Ratings and Research (Ind-Ra) has affirmed Jana Small Finance Bank Limited’s (JSFB) Non-Convertible Debentures (NCDs) and Fixed Deposits (FDs) ratings at ‘IND A’ with a ‘Stable’ outlook, effective 07th October 2025. * The reaffirmation applies to outstanding NCDs with ISIN INE953L08329 (INR 75 crore) and INE953L08311 (INR 50 crore). * NCDs with ISIN INE953L08295 and INE953L08303 have been withdrawn, as they were paid in full by 29 June 2025 and 10 July 2025, respectively. * Key Strengths highlighted by Ind-Ra: * Track record in lending with a diversified and growing secured loan portfolio, which reached 71% of Assets Under Management (AUM) by 1QFY26 and is expected to increase to around 80% by FY27-FY28. AUM stood at INR 29,930 crore (INR 299.3 billion) in 1QFY26. * Adequate profitability and capitalisation, with a Capital Adequacy Ratio (CAR) of 20.5% as of June 2025 and net worth of INR 4,231 crore (INR 42.31 billion) in 1QFY26. * Profit after tax (PAT) for 1QFY26 was INR 102 crore (INR 1.02 billion) with a Return on Assets (RoA) of 1.05%. PAT for FY25 stood at INR 501 crore (INR 5.01 billion) with a RoA of 1.41%. * Key Weaknesses/Monitorables: * Elevated refinancing and repayment risks at holding companies (Jana Capital Limited and Jana Holdings Limited) with INR 3,400 crore (INR 34 billion) outstanding debt. * Ability to mobilize low-cost deposits, as the CASA ratio declined to 17.8% as of June 2025, and the cost of funds remained slightly higher than peers at 8.0% in 1QFY26. * The bank reported a liquidity coverage ratio (LCR) of 171% as of June 30, 2025, indicating adequate liquidity. * JSFB has filed an application with RBI for voluntary transition into a Universal Bank in June 2025, requiring Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) ratios below 3% and 1% respectively for the preceding two years. The bank's GNPA was 2.8% and NNPA was 0.9% in 1QFY26.
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Jana Small Finance Bank Limited filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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See the model portfoliosA plain-language summary of a public exchange filing by Jana Small Finance Bank Limited. Read the original for the full detail.