Utkarsh SFB Shares Jump 15% After Allotment to Madhusudan Kela’s Fund House; Rights Issue Sparks Investor Interest
Shares of Utkarsh Small Finance Bank (Utkarsh SFB) witnessed a strong rally on October 24, surging as much as 15 percent in intraday trade after the lender announced that it has allotted over 5.71 crore shares to ace investor Madhusudan Kela’s fund house, Cohesion MK Best Ideas Sub-Trust, as part of its ongoing rights issue.
The stock touched an intraday high of ₹21.10 per share, before paring some gains to trade over 12 percent higher at ₹20.58 around 1:40 p.m. on the NSE.
Market participants said the announcement of share allotment to reputed institutional and global investors has boosted confidence in the small finance bank’s long-term prospects.
Cohesion MK Best Ideas Sub-Trust Leads Investor Participation
Among the participants in the rights issue, Cohesion MK Best Ideas Sub-Trust, backed by veteran investor Madhusudan Kela, emerged as the single largest subscriber, receiving 5.71 crore shares.
The development is being seen as a strong vote of confidence from one of India’s most respected market veterans, known for his strategic investments in emerging financial institutions and mid-cap companies.
Analysts noted that such marquee investor participation often acts as a sentiment booster for retail shareholders and can help re-rate valuations in the medium term.
Also Read : Profit Booking Weighs on Markets as Sensex Falls 550 Points, Nifty Slips Below 25,750
Other Major Investors in Utkarsh SFB’s Rights Issue
While Kela’s fund took the lead, several other institutional and global investors also participated in the bank’s rights issue, indicating broad-based investor interest.
Here’s a look at the key investors and their respective allotments:
India Capital Fund Ltd (Mauritius) – 4.4 crore shares
Kotak Mahindra Life Insurance Company – 4.21 crore shares
ICICI Prudential Life Insurance Company – 3.57 crore shares
FLC Investco, LLC – 2.86 crore shares
Singularity Large Value Fund III – 2.86 crore shares
Massachusetts Institute of Technology (MIT) – 2.79 crore shares
Rights Issue Details: Raising ₹949 Crore to Fuel Growth
Earlier this month, Utkarsh Small Finance Bank’s board had approved the terms of a rights issue of 67.79 crore shares to raise up to ₹949 crore at ₹14 per share.
The issue opened on October 24 and will close on November 3, offering existing shareholders an opportunity to subscribe to additional equity at a discounted price.
According to the management, the funds raised through the rights issue will be utilized for augmenting the bank’s capital base, expanding its lending portfolio, and enhancing regulatory capital adequacy to support long-term business growth.
Market experts believe that the capital infusion through the rights issue will strengthen the bank’s balance sheet, allowing it to accelerate loan disbursements, particularly in microfinance and small-business segments where Utkarsh SFB has a strong presence.
Utkarsh SFB Share Price Performance: A Volatile Journey
The rally on October 24 extended the stock’s short-term winning streak. Over the past five trading sessions, Utkarsh SFB shares have gained over 16 percent, while the one-month return stands at around 13 percent.
However, on a year-to-date basis (2025), the stock remains down about 28 percent, reflecting earlier market corrections and pressure on broader small-cap indices.
In the last six months, the stock has slipped roughly 6 percent, but analysts suggest that the recent uptick indicates renewed buying interest following the rights issue announcement and strong institutional backing.
From IPO Glory to Correction: A Look Back
Utkarsh Small Finance Bank made a stellar debut in July 2023, listing with a 60 percent premium over its IPO price of ₹25 per share, opening at ₹40 on the NSE.
Since then, the stock has seen significant volatility, currently trading around 47 percent below its listing price, though slightly above its IPO price of ₹20 per share.
Analysts attribute the correction to valuation adjustments, sectoral headwinds, and risk aversion in smaller banking counters. However, with fresh capital infusion and renewed investor confidence, the bank appears well-positioned for a recovery phase.
Analysts View: Rights Issue Marks a Turning Point
Market experts see this rights issue as a strategic move that could mark a turning point for the lender.
“The participation of marquee investors such as Madhusudan Kela and institutional funds highlights confidence in Utkarsh SFB’s long-term potential,” said a senior analyst at a domestic brokerage.
“The additional capital will help the bank strengthen its lending capabilities, reduce funding costs, and improve return ratios over time.”
Another analyst pointed out that the discounted issue price of ₹14 offers an attractive entry point for investors, especially considering the bank’s strong retail network and steady asset quality metrics.
Positive Momentum Ahead
With strong institutional participation, improving financial health, and capital expansion on the horizon, market sentiment around Utkarsh SFB appears decidedly optimistic.
Analysts believe the recent rally could sustain if the rights issue sees robust subscription and the bank continues to deliver stable quarterly performance.
“Utkarsh SFB’s capital raise and the endorsement from seasoned investors are timely developments. As the bank scales up its lending operations, we expect gradual improvement in profitability metrics,” said another market watcher.
While volatility in small finance bank stocks may persist, experts suggest that the medium-term outlook for Utkarsh SFB remains constructive, supported by strong management execution and improved capital adequacy.
Conclusion
The sharp upsurge in Utkarsh Small Finance Bank’s share price underscores renewed optimism from both institutional and retail investors. The ₹949-crore rights issue, led by Madhusudan Kela’s fund house, has positioned the lender for stronger growth momentum.
As the rights issue progresses and capital flows in, Utkarsh SFB could well be on the path to regaining investor confidence and rebuilding its market valuation in the coming quarters.
