AU vs ESAF

AU Small Finance Bank and ESAF Small Finance Bank are both financial institutions
operating in India, particularly focusing on providing banking services to underserved
and unbanked segments of the population. Here's a brief comparison between the
two:
AU Small Finance Bank:
- AU Small Finance Bank, formerly known as AU Financiers (India) Limited, started
as a non-banking finance company (NBFC) before receiving a license to operate as
a small finance bank from the Reserve Bank of India (RBI) in December 2016.
- It offers a range of banking services such as savings accounts, current accounts,
fixed deposits, loans (including personal loans, vehicle loans, and business loans),
insurance products, and investment services.
- AU Small Finance Bank primarily targets small and medium-sized enterprises
(SMEs), low-income individuals, and micro-entrepreneurs, with a focus on financial
inclusion and serving the underbanked population in semi-urban and rural areas.

ESAF Small Finance Bank:

- ESAF Small Finance Bank is a scheduled commercial bank that started as a
microfinance institution (MFI) in 1992 before receiving a small finance bank license
from the RBI in November 2016.
- It offers a range of banking products and services, including savings accounts,
current accounts, fixed deposits, micro-loans, small business loans, housing loans,
and remittance services.
- ESAF Small Finance Bank primarily targets low-income individuals, micro-
enterprises, and socially disadvantaged groups such as women and rural
communities. It places a strong emphasis on financial inclusion, livelihood promotion,
and social empowerment.
In summary, both AU Small Finance Bank and ESAF Small Finance Bank operate as
small finance banks in India, with a focus on providing banking services to
underserved and financially excluded segments of the population. While they offer
similar products and services, they may differ in their specific target markets,
geographic presence, and approach to customer engagement and financial inclusion
initiatives.

Particulars AU ESAF
AU Small Finance Bank offer
banking services such as
personal banking, online
banking, internet banking, ESAF Small Finance Bank (ESAF SFB) the
business & corporate new age social bank continues to redefine the
About banking, insurance, loans, banking experience to all the stakeholders.
 investments, retail banking &
much more.
Primary
Industry Banking Financial Services
Headquaters Jaipur, Rajasthan Thrissur, Kerala
No. of
employees 10k - 15k 1k - 5k
Types of
companies Private Private

Au Small Finance
AU Small Finance Bank Limited provides various banking and financial services in
India. The company operates through Treasury, Retail Banking, Wholesale Banking,
and Other Banking Operations segments. It provides saving, current, salary, fixed,
recurring, and COVID shield deposit accounts, as well as debit and credit cards and
locker services. In addition, the company offers car, two-wheeler, commercial
vehicle, personal, tractor, home, gold, construction equipment, business, agriculture,
and working capital loans. Further, it provides life, health, general, and motor
insurance; mutual funds and national pension system; overdraft, cash credit, bank
guarantee, and letters of credit; and internet and mobile banking, collection and
receivables, and payment and other merchant payment services. Additionally, the
company provides government banking services to central government, state
governments, central and state public sector undertakings, boards, defense, urban
local bodies, and other government departments. It operates bank branches,
correspondents banking outlets, business correspondents, and ATMs. The company
was formerly known as AU Financiers (India) Limited and changed its name to AU
Small Finance Bank Limited in May 2017. AU Small Finance Bank Limited was
incorporated in 1996 and is headquartered in Jaipur, India.
AU SMALL FINANCE BANK 's latest p/e ratio is 24.96x.
- AU SMALL FINANCE BANK 's p/e ratio for fiscal years ending Mar2023 to Mar2019
averaged 18.99x.
- AU SMALL FINANCE BANK 's operated at median p/e ratio of 17.36x from fiscal
years ending March 2018 to 2022.
- Looking back at the last 5 fiscal years, AU SMALL FINANCE BANK 's p/e ratio
peaked in Mar2023 at 27.03x.
- AU SMALL FINANCE BANK 's p/e ratio hit its five-year low in Mar2020 of 11.47x.
The Price-to-Earnings (P/E) ratio is a valuation metric commonly used by investors
to assess the relative attractiveness of a stock by comparing its current market price
per share to its earnings per share (EPS). A higher P/E ratio generally indicates that
investors are willing to pay more for each unit of earnings generated by the
company, implying that the stock may be overvalued relative to its earnings
prospects.
The reasons for AU Small Finance Bank having a higher P/E ratio compared to
ESAF Small Finance Bank could include:
1. **Growth Prospects:** AU Small Finance Bank may have stronger growth
prospects or a track record of higher earnings growth compared to ESAF. Investors
may be willing to pay a premium for AU's stock in anticipation of future earnings
growth.
2. **Market Sentiment:** Market sentiment and investor perception can significantly
influence stock prices and P/E ratios. If investors have a positive outlook on AU
Small Finance Bank due to factors such as its business model, market position, or
management team, they may be willing to pay a higher price for its stock relative to
its earnings.
3. **Risk Perception:** Investors may perceive AU Small Finance Bank to have lower
risk or higher stability compared to ESAF, leading to a higher valuation. Factors such
as asset quality, capital adequacy, and regulatory compliance can influence
investors' risk perceptions.
4. **Size and Liquidity:** Larger companies often command higher valuations due to
their scale, market presence, and liquidity. AU Small Finance Bank may be larger in
terms of market capitalization and trading volume compared to ESAF, leading to a
higher valuation multiple.
5. **Industry Dynamics:** Differences in the competitive landscape, market
dynamics, and regulatory environment between the two banks' operating regions
could impact their respective valuations.
It's important to note that the P/E ratio alone may not provide a complete picture of a
company's valuation or investment attractiveness. Investors should consider other
financial metrics, qualitative factors, and industry trends when making investment
decisions. Additionally, stock prices and P/E ratios can fluctuate over time in
response to changes in market conditions, company performance, and investor
sentiment.