Equitas Small Finance Bank IPO Opens for Subscription Today: All You Need to Know

The initial public offering of Equitas Small Finance Bank opened for subscription today. ESFBL, the wholly-owned subsidiary of NBFC Equitas Holdings, provides agri-loans, housing loans, LAP, micro lending and vehicle loans to unserved and underserved segments of the economy. It has set a price band of Rs 32-33 for the IPO.

The public issue includes a fresh issue of Rs 280 crore and an offer for sale of up to 7,20,00,000 shares equity shares by promoter Equitas Holdings (EHL). Those who want to subscribe should note that bids can be made for a minimum of 450 equity shares. If a person wants to bid for more shares, then it should be done in multiples of 450 equity shares. The issue will be open for subscription till October 22.

The bank has reserved issue of up to Rs 51 crore for subscription by eligible EHL shareholders and up to Rs 1 crore for bidding by eligible employees.

At lower price band, the IPO is expected to raise Rs 510.4 crore and at upper band, it will fetch around Rs 518 crore.

The issue has been released with an aim to augment the bank's Tier – 1 capital base to meet future capital requirements. Basically, money raised through the IPO will be used for organic growth and expansion and to comply with the regulatory requirements.

However, the money fetched from the offer for sale will not go to the bank as it will be taken by the EHL.

ESFBL is the largest small finance bank in India in terms of the number of banking outlets. Besides, it is the second largest small finance bank in the country in terms of Assets under Management (AUM) and total deposits.

The bank registered a net profit of Rs 57.67 crore for the quarter ended in June. In the same period last year, ESFBL reported a net profit of Rs 57.06 crore. Apart from this, in FY20, it witnessed a rise in profit compared to last year - from Rs 210.56 crore in FY19 to Rs 243.63 crore.