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We are overwhelmed and surprised by market response: Nitin Chugh, Ujjivan SFB

Ujjivan SFB has not seen rural slowdown as microfinance itself is insular to economic cycles.

ET Now|
Updated: Dec 12, 2019, 10.22 PM IST
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Ujjivan SFB makes stellar debut; gains 60% against issue price
Ujjivan SFB makes stellar debut; gains 60% against issue price
We have been positioning ourselves as a mass market bank though we started off as a microfinance company and that continues to be our core forte, says Nitin Chugh, MD & CEO, Ujjivan Small Finance Bank. Excerpts from an interview with ETNOW.

Did the response to the Ujjivan Small Finance Bank IPO surprise you?
Yes, we did expect the IPO to do well but not to this extent. We are overwhelmed and surprised. At the same time, we are very thankful to all categories of investors -- the institution investors, HNIs, retail and existing shareholders of the holding company. It has been a remarkable response.

In terms of the response that you have got from the investors, what were the differentiators as far as your particular bank goes? Why do you think the investors have subscribed to your IPO?
We have a very good story. It shows the confidence and our credibility in the market. I believe, Ujjivan as an organisation stands out amongst the SFBs and in any case, the results that we have been displaying over the last so many years go a long way in confidence building with the investor community. We would like to believe that explains the overwhelming response from the investors.

In terms of your offerings also, where does the differentiation lies as far as the competition goes?
We have been positioning ourselves as a mass market bank though we started off as a microfinance company and that continues to be our core forte. But at the same time, we are very focussed on the mass market. We have developed a lot of capabilities to serve the mass market and I believe the market itself is pretty large for a lot of players but our differentiation lies in the fact that we stand for unrelenting focus in this market. The way we serve our customers and the way we also make use of technology are all going to be long-term differentiators for us in the times to come.
Ujjivan has always invested in technology but there is a lot of stuff which is cooking right now. It is only appropriate that we keep revealing that as and when we are ready to do that;

-Nitin Chugh



You said digital technology has been your forte. What is going to happen that is different from what we have seen so far?
We have been investing in technology and also in digital over a period of time. It was not waiting for me to be here. Ujjivan has always invested in technology but there is a lot of stuff which is cooking right now. It is only appropriate that we keep revealing that as and when we are ready to do that; most recently, we announced our digital savings and digital fixed deposits which has really eased out the account opening process. Though it is not a new thing in the industry but yes in the small finance bank category, we are probably amongst the first few to be doing that and that also helps us target a different category of customers especially the younger people in the mass market.

Going forward, you digital strategy is going to be one of the key offerings from the bank and a huge part of your strategy going forward.
Digital is going to be an overarching strategy but we believe that there are things that we want to do for our customers in terms of the interface that we provide to them or the services that we provide to them. Equally important is what we do within the bank and that is where we have a lot of work going on and you will see a lot of things coming out of Ujjivan.

If you look at the kind of customers that you serve, it would be right to say that you have the pulse of what is happening with the rural economy, where demand is right now. Do you see some kind of pickup? Are the initiatives taken by the government as well as the RBI giving a rural boost?
We have not seen a slowdown quite honestly because microfinance is reasonably insular to economic cycles. There could be some patches here and there, but those are most affected because of things like floods. This year, we had a lot of floods in many places. Those pockets get affected, but we are very diversified across the country in 24 states and union territories. At Ujjivan, we have seen the demand going up or staying at least in most of the pockets. At the same time, the industry is growing in a pretty healthy basis and most of the reports in the past have also indicated that the microfinance part of the book which is related to the rural markets in a large sense, though not necessarily rural only, has not seen a problem of demand. There is demand for credit and that has not come down.

Also Read

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