Equitas Small Finance Bank listing: Debuts on Stock Exchanges today; Details

Equitas Small Finance Bank (SFB) will list on bourses on November 2, 2020. Equitas SFB, the wholly-owned subsidiary of Equitas Holdings, has fixed the issue price at Rs 33 per share.

The company's Rs 518 crore initial public offering which was open between October 20, 2020, and October 22, 2020, saw a muted response and was subscribed 1.95 times. The quota reserved for the qualified institutional buyer (QIB) was subscribed 3.91 times. The quota set aside for retail investors was subscribed 2.08 times. The offer included a fresh issue of shares worth Rs 280 crore and an offer for sale of 7,20,00,000 shares by the parent company (Equitas Holding).

Following a tepid and muted response to the public issue and the weak market conditions, it seems that the shares of the small finance bank will not list at a premium.

About the IPO

The company bought an IPO primarily as its effort to meet the RBI norms, which mandates listing of small finance banks within three years from the date when its new worth reaches Rs 500 crore. Besides, the promoters of Equitas Holdings are also required to reduce their shareholding in Equitas Small Finance Bank to 40 per cent of its paid-up equity share capital within five years from the date of commencement of its business as an SFB and further reduce it to 30 per cent and 26 per cent within 10 years and 12 years, respectively, of the date of commencement of business.

Small Finance Bank's Financials

Equitas Small Finance Bank has witnessed significant growth as its market share grew 16 per cent in terms of assets under management in India in FY19. Its gross advances - including IBPC issued - grew from Rs 7,937.05 crore as of March 2018 to Rs 15,572.91 crore as of June 2020. The bank's deposits have grown at a CAGR of 38.75 per cent from Rs 5,603.97 crore as of March 2018 to Rs 10,788.4 crore million as of March 2020.