Equitas Holdings Ltd will divest its entire stake in subsidiary Equitas Technologies Pvt Ltd (ETPL) as part of the requirement for the merger with Equitas Small Finance Bank (ESFB).
As part of the RBI's licensing conditions, being the promoter of ESFB, the boards of Equitas Holdings and ESFB had in July 2021 approved the scheme of amalgamation between them.
According to this scheme, all the assets held by Equitas Holdings, including its investments in ETPL, have to be transferred to and vested in ESFB.
"Since ETPL is not engaged in financial services, the company is required to fully divest its investment in ETPL. Accordingly, the board of directors in its meeting held on January 7, 2022, approved sale of its entire shareholding in the company's subsidiary, ETPL," Equitas Holdings said in a regulatory filing on Saturday.
Equitas Holdings Ltd (EHL) has two subsidiaries -- ESFB and ETPL. The latter is engaged in the business of freight aggregation.
Equitas Holdings said it has appointed SBI Capital Markets (SBICAPS) to advise on the strategic buyout and/or stake sale of ETPL.
SBICAPS is in the process of undertaking a public auction process to identify potential buyer(s) and complete the transaction, it added.
The RBI approved the merger between the promoter and subsidiary company in July last year.
As per the RBI norms on small finance banks, it is mandatory for the promoter of a small finance bank to reduce the stake in the subsidiary to 40 per cent within five years of commencement of operations of the small finance bank.
ESFB commenced operations from September 2016.
As of September 30, 2021, EHL held 81.55 per cent stake in Equitas Small Finance Bank (ESFB), according to data on BSE.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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