AU Small Finance Bank is under pressure due to the fresh COVID-19 curbs announced by various state governments.

Rajasthan has imposed restrictions with respect to non-essential services and is going in a lockdown between April 19 and May 3.

Other states like Maharashtra, Gujarat, Madhya Pradesh, Delhi are also worst affected by coronavirus. With all these states put together, AU Small Finance has about 89 percent of its assets. In Rajasthan, they have about 42 percent of their assets, and going into lockdown could impact the collection efficiency for AU Small Finance Bank.

Therefore, the worry that the street might be looking into and restriction in movement could also impact the collection efficiency in other states.

So this would increase the burden of higher provisions going ahead as well as impact its asset quality. The other factor is that they recently did a qualified institutional placement (QIP).

Watch the accompanying video of CNBC-TV18’s Abhishek Kothari for more details.

(Edited by : Priyanka Rathi)