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Equitas Small Finance Bank IPO ends with decent subscription

Published on Oct 23, 2020 12:33

The initial public offer (IPO) of Equitas Small Finance Bank received bids for 22.57 crore shares as against 11.58 crore shares on offer, as per the National Stock Exchange of India (NSE) website data at 17:00 IST. The issue was subscribed 1.95 times.

The qualified institutional buyers (QIBs) category was subscribed 3.91 times. The retail individual investors (RIIs) category was subscribed 2.08 times. The non-institutional investors category was subscribed 0.22 times.

The issue opened for bidding on 20 October 2020 and closed on 22 October 2020. The price band for the IPO was set at Rs 32-33 per share.

The IPO consisted of fresh issue of shares amounting to Rs 280 crore and an offer of sale comprised of 7.20 crore shares by the bank`s promoter, Equitas Holdings (including anchor portion of 4.23 crore equity shares).

Ahead of the IPO, Equitas Small Finance Bank raised Rs 139.68 crore from anchor investors on 19 October 2020. It has finalised allotment of 4,23,27,271 equity shares to anchor investors at upper price band of Rs 33 per equity share.

The bank proposes to utilize the net proceeds from the offer towards augmenting bank`s Tier I capital base to meet bank`s future capital requirements such as organic growth and expansion and to comply with the regulatory requirements for enhanced capital base, as may be prescribed in the future.

The listing of the bank is also in line with terms of the RBI in-principle approval, RBI final approval and SFB licensing guidelines, requiring the bank to list its equity shares on the stock exchanges within three years from the date of commencement of business by the bank.

The small finance bank recorded net profit of Rs 57.67 crore and total income of Rs 750.96 crore in the quarter ended on 30 June 2020.

Equitas Small Finance Bank is the largest small finance bank in India in terms of number of banking outlets and the second largest SFB in India in terms of assets under management and total deposits in FY2019. The bank has successfully diversified its loan portfolio and significantly reduced its dependence on microfinance business as compared to other microfinance companies that have converted to SFBs.

The bank offers a range of banking products and services to customers with a focus on serving the financially unserved and underserved customer segments in India. Its strength lies in promoting financial inclusion within these segments.

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