Small finance bank (SFB) licencee, Equitas Holdings is going public after announcing on Tuesday that it is raising Rs 720 crore via an initial public offering (IPO) which will be open from April 5 to April 7. While the company has fixed a price band of Rs 109-Rs 110 for the IPO, several of its existing investors are also using the opportunity by making an offer for sale (OFS) of nearly 13.24 crore shares.
The IPO and the OFS, if successful, will bring down foreign shareholding in the company to 35% from the existing 93%. According to Reserve Bank of India (RBI) guidelines, foreign shareholding in SFBs can be up to a maximum of 49%.
Around 50% of the public offer will be reserved for the qualified institutional buyer (QIB) category, out of which 60% will be reserved for the anchor investors who can bid for the issue on March 4 and 5% of the QIB category will be reserved to mutual funds. High networth individuals can bid from 15% of the total issue which will be reserved for their category and retail investors will have 35% of the total issue to bid from.
The first of all small finance banks to be taking the IPO route, the company aims to use the proceeds of the issue for augmenting its capital base and for general corporate purposes. The management also announced that three of its holding companies including its microfinance, housing and MSME arms would be merged before the company starts its SFB operations.
The book running lead managers for the issue are Axis Capital, Edelweiss Financial Services, HSBC Securities and Capital Markets and ICICI Securities. The company had reported total income of `794.7 crore and a profit after tax of `120.3 crore for the nine months ending in December 2015. Its total assets under management (AUM) stood at `5,505 crore.