Equitas Small Finance Bank Limited has fixed a price band of ₹32-33 per equity share for its Initial Public Offering (IPO) to boost its tier I capital. The three-day share sale opens for subscription during October 20-22, which targets to increase ₹517.6 crores at the upper end of the price band. Post this offer, Equitas Holdings shares in the share will come down from 95.49% to 82-83%.
The IPO constitutes a fresh issue aggregating up to ₹280 crores and provides an offer for sale up to 72,000,000 equity shares by Equitas Holdings Limited. Bids can be made for a minimum of 450 equity shares and in multiples of 450 afterward.
Equitas Small Finance Bank Limited is focusing on inorganic growth opportunities to drop the promoter stake post the completion of the initial public offering process. PN Vasudevan, MD, and CEO mentioned that the bank is looking at acquiring a housing finance company or non-banking finance company. According to regulatory criteria, the supporter needs to reduce the stake of 40% in a small finance bank before September next year. The objective of the offer is to be filed on both the Bombay Stock Exchange (BSE) Limited and the National Stock Exchange of India Limited (NSE).
Equitas Small Finance Bank is the biggest small finance bank in India as per the number of banking outlets, and the second-largest in India in terms of assets under management and total deposits in the financial year 2019. Products included in the offer are small business loans, housing loans, agriculture loans, vehicle loans, Micro and Small Enterprises (MSE) loans, etc. They offer current accounts, salary accounts, savings accounts, and a variety of deposit accounts on the liability sides to their clients. Furthermore, it also provides non-credit offerings involving Automated Teller Machine(ATM)-cum-debit cards, third party insurance, mutual fund products, and issuance of FASTags.
Its gross advances were at ₹15,572.91 crores as of 30 June 30, of which secured advances composing 75.75% by the quarter. Their deposits grow at a Compound Annual Growth Rate(CAGR) of 38.75% from ₹5,603.97 crores as of March 2018 to ₹10,788.41 crores as of 31 March 2020.