NBFC stock in focus after Tata Life Insurance acquires stake in the company via block deal

Synopsis:: The shares of this small-cap NBFC company was in focus following the news of the Massachusetts Institute of Technology is selling a 1.25% stake, along with TATA Life Insurance acquiring a 0.75% stake. Other parties were also involved; let us see who they are and learn more about the deal.    

This company, which is an NBFC, offers secured MSME loans and loans against gold. It had its shares in focus after a block deal took place where FII and DII exchanged shares in which parties like MIT and tata were involved , one sold whereas other one bought. 

With the market cap of Rs 11,462 crore, the shares of SBFC Finance Ltd had hit its intraday low at Rs 104.3, falling by about 0.5 percent compared to its previous day closing price of Rs 104.85. The shares are trading at a PE of 29.2, whereas its industry PE is at 21.8, and have given a return of 19 percent since its listing in August 2023. 

About the block deal

SBFC Finance saw active block deal action, highlighted by the complete exit of MIT’s FDI arm. The Massachusetts Institute of Technology sold its entire 1.25% stake, or 1.36 crore shares, for about Rs 143.37 crore at Rs 105.14 per share, bringing an end to its investment in the company.

Other overseas investors also pared their holdings. The MIT Basic Retirement Plan Trust sold 13.86 lakh shares (0.12%), while 238 Plan Associates LLC exited 3.41 lakh shares (0.03%), both at the same price. These transactions point to selective exits and portfolio reshuffling by foreign investors rather than any immediate concern around the company.

On the other side of the trade, demand came from well-known institutional names. Tata AIA Life Insurance picked up 82.31 lakh shares (0.75%) for about Rs 86.54 crore, while Aranda Investments, backed by Temasek Holdings, acquired 71.33 lakh shares (0.65%) for Rs 75 crore. The presence of these buyers signals sustained institutional confidence in SBFC Finance’s long-term prospects.

Financials and others

The company’s net interest income (NII) and profit after tax (PAT) are both moving up steadily. Interest income on loans increased to Rs 375 crore in Q2 FY26, from Rs 350 crore in Q1 FY26 and Rs 281 crore in Q2 FY25, translating into 7.2% quarter-on-quarter and a 33.5% year-on-year growth. This momentum flowed through to the bottom line, with PAT rising to Rs 109 crore, up from Rs 101 crore in Q1 FY26 and Rs 84 crore in Q2 FY25, reflecting 8.2% QoQ and 30% YoY growth, underlining improving profitability without compromising cost discipline.

SBFC focuses on supporting entrepreneurs and MSMEs across India, providing loans that help businesses start operations, expand premises, hire employees, upgrade equipment, and develop new products. The company follows a “phygital” approach, combining digital technology with strong personal relationships on the ground, allowing it to offer credit at the right time while building trust with customers.

With an extensive branch network spread across cities, including many Tier-2 and Tier-3 locations, SBFC is able to reach underserved and underbanked businesses. Beyond lending, the company also offers specialised loan management services to institutional lenders, covering areas such as customer servicing, collections, payments, data handling, and loan porting.

Written by Leon Mendonca

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