Equitas plans to revamp shareholding in small finance bank, aims merger

Industry:    2018-11-06

Signalling that it may not go for an IPO for its small finance bank, the Chennai-based Equitas Holdings (EHL) has revealed that it is planning to revamp the shareholding in the entity. EHL plans to dilute up to 60% of its holdings in Equitas Small Finance Bank (ESFBL) in favour of its existing shareholders and remain a non-operating core investment company till it gets regulatory approvals to merge with the bank.

Mutual fund players hold the highest stake in EHL with 37.43% while foreign investors together hold 31.30%. Resident indvidual and others own 15.22% and corporate bodies, banks, NBFCs and trusts have a 14.46% stake in the company while employees hold 1.59% shares.

The board of directors of EHL has constituted a committee with a mandate to evaluate various options within the timelines prescribed by the Reserve Bank of India, including through an appropriate scheme of arrangement and reconstruction, without the need for going for an initial public offer, the company has told the stock exchanges, in a regulatory filing.

As per the RBI requirement, ESFBL, wholly-owned subsidiary of the publicly-listed Equitas Holdings has to get listed within three years from the date of commencement of operations, by September 4, 2019.

The net profit of EHL in Q2 grew 3.5 times over previous year to Rs 49.7 crore compared to Rs 10.9 crore. The company’s advances grew 36% y-o-y to Rs 9,981 crore with stable growth across segments. Non-micro finance lending products constituted 73% of total portfolio. The total deposits grew by 90% to Rs 5,698 crore while CASA ratio stood at 35%. The capital adequacy remains healthy at 23.84% with Tier I ratio being at 22.27%, said a statement by the company.

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