Equitas small finance bank files for IPO

Equitas Small Finance Bank (SFB) has filed a draft prospectus with the Securities and Exchange Board of India (SEBI) to float an initial public offering. The IPO comprises a fresh sale of shares worth Rs 550 crore and a secondary market sale of 80 million shares by Equitas Holdings. The total IPO size is pegged at Rs 1,000-1,100 crore.


An IPO and stock-market listing is imperative for a bank’s operations. In September, the Reserve Bank of India (RBI) had barred Equitas from opening new branches for missing its listing deadline, a key licensing condition.


The central bank had warned the lender that it might impose more restrictions if it failed to make 'satisfactory progress' towards listing its shares. Equitas SFB is the largest SFB by banking outlets and second-largest by assets and deposits.


The bank, which was formerly knowns as Equitas Finance Ltd, will join Ujjivan SFB and PE-backed AU Small Finance Bank Ltd in going public. The bank will use fresh net proceeds from the IPO to augment its tier – 1 capital base to meet its future capital needs for organic growth, expansion, and meeting regulatory requirements. The proceeds from the secondary sale will go to the promoter selling shareholder.