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Equitas finalises small finance bank listing plan

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Kolkata: Equitas Holdings has decided to offer 47% of its ownership in Equitas Small Finance Bank to its existing shareholders.

The bank will then look to list the shares on the stock exchanges using a provision that allows companies to get listed without making an initial public offer of shares, managing director PN Vasudevan told ET.

While the record date for this exercise will be finalised after getting regulatory approvals, Equitas's investors at present includes International Finance Corporation, CDC Group and a host of local and overseas funds. Equitas Holding is a listed entity while RBI has also directed it to list Equitas Small Finance Bank as per the bank licensing agreement.

The deadline for the bank’s listing is September 4.

Equitas, which is the holding company of the bank, will issue about 89 crore fully paid-up equity shares of face value Rs 10 each of the bank to its existing shareholders on the record date, for no cash consideration.

This will dilute the holding company’s stake in the bank to 53%. Equitas board has approved the composite scheme of arrangement on Friday. Ujjivan Financial Services is also working on similar schemes to list Ujjivan Small Finance Bank as per regulatory directive.

For Ujjivan, the deadline is January 2020. RBI also mandates promoters of the small finance banks to pare their holding to 40% by five years of banking operation.

Accordingly, Equitas is required to reduce its stake to 40% by September 4, 2021. There is another lock-in clause under the licensing agreement under which Equitas will have to maintain a minimum 40% holding in the bank for a period of five years from the commencement of banking business till September 4, 2021. Equitas Small Finance Bank has Rs 10,861 crore of loan portfolio at the end of December last year, reflecting a 41% annual growth.

It has diversified about 73% of its portfolio beyond microfinance to reduce concentration risk. On Friday, it has also announced its net profit at Rs 62 crore for the December quarter as against Rs 30 crore loss in the year ago period.




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