Having received the nod from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO), Equitas Small Finance Bank is gearing up to go public as soon as possible, said a top executive. “As of now, we don’t have any deadline for the IPO. We are working on going public as quickly as possible,” said P.N. Vasudevan, MD and CEO of the bank. The IPO comprises fresh issue of ₹550 crore and an offer-for-sale of eight crore equity shares.
The offer price and date will be decided by ESFBL and promoters selling the shares in consultation with book running lead managers in accordance with the book building process and red herring prospectus. JM Financial, Edelweiss Financial Services and IIFL Securities are the book running lead managers to the issue.
The proceeds of the fresh issue would be used to augment the bank’s tier-I capital base to meet the future capital requirements.
Earlier, while granting an in-principle approval for the bank, the RBI had asked ESFBL to get the entity listed within three years (by September 4, 2019) and reduce promoters’ stake to 40%.
ESFBL has 1,077 branches in 15 States and is a wholly owned subsidiary of Equitas Holdings Ltd. (EHL). The parent company approached the SEBI with a reverse merger proposal.
Since, the regulator did not approve the proposal, EHL and ESFBL boards approved a scheme of arrangement wherein ESFBL would capitalise its free reserves and issue shares to the shareholders of EHL without cash consideration. As the deadline for listing was nearing, ESFBL sought an extension of the same. On September 4, the RBI declined to extend the same.
Later, ESFBL decided to go public and filed a red herring prospectus on December 16 and it was approved on February 3.