Microfinance lender Equitas Holdings today said it has received approval from Madras High Court to amalgamate its subsidiaries so as to set up small finance bank.
In September last year, the Reserve Bank had granted an in-principle approval to ten applicants alongside Equitas Holdings to start small finance bank.
“The petitions filed by the subsidiaries – Equitas Micro Finance (EMFL), Equitas Housing Finance (EHFL) and Equitas Finance (EFL) before the Honourable High Court of Madras seeking its approval for the Scheme of Amalgamation of EMFL and EHFL with EFL…have been approved by the HC,” Equitas Holdings said in a BSE filing.
The approval was sought to comply with the terms of in-principle approval granted by RBI for setting up a Small Finance Bank (SFB), it added.
Equitas Holdings said the merger will take effect from the working day immediately preceding the date of commencement of business of small finance bank.
The Chennai-based company supplies credit to small business units, small and marginal farmers, micro and small industries and other unorganised sector entities, through high technology-low cost operations.
Earlier in April this year, the company raised Rs 2,200 crore through its initial public offering (IPO).
With the IPO, company’s foreign holding was brought down to 35 per cent, from the 93 per cent earlier.
As per RBI regulations, foreign shareholding should be an entity below 49 per cent to operate as a small finance bank.
Company’s stock closed flat at Rs 171.95 on BSE.