Shares of Equitas Holdings Ltd (EHL) and Equitas Small Finance Bank (ESFB) on Tuesday jumped up to 10 per cent as the board of directors and shareholders of the two companies approved their amalgamation scheme.

Equitas Holdings rallied 9.92 per cent to Rs 136.80 on BSE.

The stock of Equitas Small Finance Bank also gained 8.78 per cent to Rs 68.70.

The board of directors and shareholders of EHL and ESFB on Monday approved the amalgamation scheme of the two companies.

The share exchange ratio would result into each shareholder of the transferor company, EHL, getting 226 equity shares of the transferee company, ESFB, for every 100 shares held by them in the holding company.

EHL (transferer company) is the promoter or the holding company of ESFB (transferee company).

Earlier this month, Equitas SFB had received Reserve Bank of India's (RBI) nod to apply for amalgamation of the promoter into itself.

The intent of the amalgamation is to comply with the RBI norms on small finance banks, mandating the promoter to reduce the stake in the subsidiary to 40 per cent within five years of commencement of operations by the SFB.

As of June 30, 2021, EHL held 81.75 per cent stake in ESFB.