Equitas Small Finance Bank Files Papers For Rs 1,000-Crore IPO
Indian five hundred rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Equitas Small Finance Bank Files Papers For Rs 1,000-Crore IPO

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Equitas Small Finance Bank on Monday said it has filed draft red herring prospectus with the regulator Securities and Exchange Board of India for Rs 1,000 crore initial public offer.

The IPO comprises a fresh issue aggregating up to Rs 550 crore and an offer for sale of up to 80,000,000 equity shares by Equitas Holdings Ltd., the promoter, Equitas Small Finance Bank said in a statement.

The offer includes a reservation of up to Rs 100 crore for subscription by eligible EHL shareholders and a reservation aggregating up to Rs 5 crore for subscription by eligible employees, it said.

"In terms of the RBI (Reserve Bank of India) In-Principle Approval, RBI Final Approval and SFB Licensing Guidelines, the Bank is required to list its equity shares on the Stock Exchanges within three years from the date of commencement of business by the bank," it said.

The bank proposes to utilise the net proceeds from the offer towards augmenting Tier I capital base and to meet future capital requirements.

The equity shares will be listed on BSE and NSE.

In September after the small bank failed to be listed within the stipulated time frame as per the licence agreement, the banking regulator,RBI, refused to extend the listing deadline for Equitas SFB and barred it from opening new branches till further orders.

The regulator also froze the pay of Chief Executive Officer Vasudevan PN. RBI rules mandate that a small finance bank should list within three years of reaching Rs 500-crore net worth.

Although the RBI directive does not have a major implication on the business, the bank will be forced to list by March 2020.

Equitas SFB have been able to diversify their loan portfolio and significantly reduce dependence on microfinance business as compared to other microfinance companies that have converted to SFBs, it said.

The equity shares will be listed on BSE and NSE, it said.

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