Equitas SFB to raise up to ~1k cr via QIP

Equitas Small Finance Bank (SFB) plans to raise up to ~1,000 crore in equity capital by issuing shares to institutional investors to meet minimum public shareholding (MPS) norms. The amount to be raised includes a premium on shares.

The firm’s board has approved this raise, which is being done to fulfil requirements stipulated by Securities and Exchange Board of India (Sebi), by raising equity through qualified institutions placement (QIP), the firm informed the BSE.

Its stock closed with a gain of about one per cent at ~67.3 per share on the BSE on Monday. Its capital adequacy ratio stood at 24.07 per cent at the end of June.

Listed entities are expected to have at least 25 per cent public holding. However, the promoters held about 81 per cent stake in the bank as of June.

The bank made its stock market debut on November 2, 2020. Last year, the Reserve Bank of India had barred Equitas SFB from opening new branches after it missed the deadline to list its shares on the stock exchanges, a key licensing condition. The RBI also froze the salary of the SFB’S managing director and CEO. Both curbs were lifted after listing.

Meanwhile, its deposits rose by 40 per cent (year-onyear, or YOY) to ~18,094 crore as in Q2FY22 from ~12,901 crore last year. The share of low-cost deposits — Current Account and Savings Account (CASA) — in total deposits stood at 45 per cent in September, up from 25 per cent a year ago.

Its advances rose by 13 per cent YOY to ~18,981 crore in Q2 from ~16,731 crore a year ago. Disbursements rose 65 per cent YOY to ~3,137 crore in Q2.

Stock of the firm closed with a gain of about one per cent at ~67.3 per share on the BSE on Monday. Its capital adequacy ratio stood at 24.07 per cent at the end of June