Equitas Holdings will hit the capital markets on Tuesday with its ₹2,200-crore initial public offering, making it the first public issue of the new fiscal.
The company, with a licence for small finance bank (SFB), has fixed the price band at ₹109-110 per share.
The IPO consists of a fresh issue of shares aggregating ₹720 crore and an offer for sale of shares held by PN Vasudevan, MD, and private equity shareholders.
Among the PE shareholders, Aavishkaar Goodwell India Microfinance Development Company, Aquarius Investments Ltd, India Financial Includion Fund, Lumen Investment Holdings and Sequoia Capital India Investments III will exit the firm by selling their entire stakes, the company today said.
“The IPO will help us bring down the stake of foreign shareholder from the current 93 per cent to 35 per cent. You need to have foreign shareholding below 49 per cent to operate as an SFB,” Vasudevan told reporters.
“Equitas Holdings is the holding company of three of our firms. We are already in the process of amalgamating all these three companies into a single entity which will be the SFB.”
The company has filed a petition in the Madras High Court in this regard.
The three of its subsidiaries are engaged in microfinance lending, used commercial vehicle financing and housing finance.
As per the norms, the company has a deadline of April 2017 to start its SFB operations and is well on track.
“We currently have 539 branches across 12 states in the country and in the first place, we will cover all these into branches of the bank,” Vasudevan said.
Further, he said, the money generated from the fresh issue will be used to develop IT infrastructure for the new bank and for lending purposes.
“Currently, we have thought of two new products for the new bank, apart from the existing offerings. We will offer a gold loan, which has a huge demand among rural and semi-urban segments and also two-wheeler loans for our existing customers,” he added.
Axis Capital, ICICI Securities, HSBC and Edelweiss Financial Services are managing the company’s IPO.
The shares offered through the issue are proposed to be listed on BSE and NSE.