IPO Alert: Equitas Small Finance Bank downsizes offer size for proposed IPO

Equitas Holdings Ltd on Friday said its small finance bank subsidiary has revised downward the fresh issue of equity shares for its proposed IPO to Rs 280 crore from Rs 550 crore planned earlier.

Also, Equitas Holdings (as the parent company) will offer lesser number of shares for sale at 7.2 crore in the initial public offer (IPO) of Equitas Small Finance Bank (ESFB).

In the draft red herring prospectus (DRHP) filed on December 16, 2019, ESFB had informed Sebi about its Rs 1,000 crore IPO which comprised 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 Limited (EHL).

"Pursuant to relaxation permitted by Sebi vide its circular dated April 21, 2020, ESFB had filed with Sebi an addendum to its DRHP revising its offer size for the proposed IPO of its equity shares," EHL said in a regulatory filing.

As per the revised offer, "the size of the fresh issue has been reduced from up to Rs 5,500 million (Rs 550 crore) to up to Rs 2,800 million (Rs 280 crore) and the number of equity shares offered through the offer for sale by the company (EHL) has been reduced from up to 80,000,000 equity shares to up to 72,000,000 equity shares," it said.

Among others, the employee reservation portion for eligible employees has been reduced from up to Rs 50 million (Rs 5 crore) to up to Rs 10 million (Rs 1 crore); and the EHL shareholder reservation portion for eligible EHL shareholders has been reduced from up to Rs 1,000 million (Rs 100 crore) to up to Rs 510 million (Rs 51 crore).

In its annual report 2019-20, EHL said that as per the banking licensing condition from the RBI, the banking subsidiary should had to be listed separately by the end of the third year of the start of business, according to which the deadline for the company was September 4, 2019.

Notably, the market regulator in April extended validity of regulatory approval for launching initial public offering and rights issue by six months in the wake of the coronavirus pandemic.

The ESFB IPO was scheduled around the end of March 2020, however, it had to be put on hold due to the spread of COVID-19 disease.

Stock of Equitas Holdings closed at Rs 51.85 apiece on BSE, up 6.58 per cent from the previous close.

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