280 crore worth of new shares will be issued under this IPO.
From today the action is going to increase again in the primary market. Today the IPO of Equitas Small Finance Bank (EQUITAS SMALL FIN BANK) will open. This issue will open today, ie on October 20 and close on October 22. The price band for this issue is Rs 32-33 per share. The company plans to raise Rs 520 crore through this IPO. The lot size of this IPO is 450 equity shares. This means it can bid for a minimum of 450 equity shares. After this, bids can be made in multiples of 450 equity shares.
280 crore worth of new shares will be issued under this IPO. In addition, 7.2 crore equity shares of the bank’s holding company Equitas Holdings Limited will be allotted through Offer for Sale.
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What is the business of the company
Equitas Small Finance Bank (QUITAS SMALL FIN BANK) is in the business of microfinancing. It finances home, vehicle, MSE. The company has 853 banking outlets and 322 ATMs. Its average loan size is 4 lakh rupees.
Why is this IPO coming
This IPO is coming due to RBI regulations. As per RBI rules, promoters of a small finance bank have to reduce their stake in the bank to 40 per cent after 5 years of operation. Equitas Small Finance Bank is scheduled to complete 5 years of operations in September 2021. These IPOs are being brought to comply with this rule.
Financial position of the company
The IPO pricing is attractive. It is available at a discount of 50% compared to Ujjjivan SFB. The company’s CAR is 21.6 percent and CASA ratio is 20 percent. However, MSME exposure may increase the company’s GNPA. Its GNPA could grow from 2.7 per cent to 4 per cent in FY 2021. In FY 2020, the company’s income increased from Rs 1434 crore in FY 2019 to Rs 1777 crore. The company’s profit in FY 2020 increased from Rs 210 crore in FY 2019 to Rs 243 crore.
Who is the lead manager
Let us tell you that the IPO of Equitas Small Finance Bank will be the 12th IPO of the year 2020. This IPO will close on 22 October. It will be listed in the market on November 2. The company has appointed JM Financial, Edelweiss Financial Services and IIFL Securities as lead managers for the IPO. KFin Technologies Private Limited is the registrar company for the issue and will manage the allocation and refund of shares.
