Equitas Small Finance Bank IPO Will Make A Touchdown On October 20

As the initial public offer market is gaining steam in 2020, several companies from different sectors are testing the water with their IPO offers. Equitas Small Finance Bank is the first bank to float initial public offer this year. The IPO issues will hit the market on October 20.

Equitas Small Finance filed the DRHP documents in 2019. Sources aware of the developments informed that if the public offering opens on October 20, it will be the 12^th IPO launch of the year.

The bank informed SEBI last month that it will launch the shares in the price band of Rs 34-35 apiece, with the total offer size going up to Rs 532 crores considering the upper limit of the price band.

Equitas Small Finance Bank IPO will contain eight crores fresh equities, and 7.2 crores in an offer for sale shares. The offer includes one crore shares reserved for eligible employees and Rs 51 crores worth of shares for existing shareholders of Equitas Holdings.

About Equitas Small Finance Bank

Equitas Small Finance Bank is the largest SBF in India in terms of bank branches and second largest in terms of total asset under management and deposit as per CRISIL reports of 2019.

Incorporated in 1993, the Chennai based bank offers a range of banking services and products, focusing mainly on the unbanked population in rural and urban areas.

The group started operating as NBFC in 2007. Currently, it offers diversified loan products including, microloans, housing finance, vehicle finance, and MSE finance. During June 2020 quarter, the bank clocked Rs 576.71 million profit against Rs 7,509.68 million revenue. In the number of total banking outlets, Equitas SBF is the largest with 853 branches and 322 ATMs in 15 states.

Competitive Strengths

• Customer-focused business operation
• Diversified asset portfolio
• Strong branch banking and retail presence
• Credit assessment procedure

Highlights Of The Equitas Small Finance Bank IPO

• Equitas Small Finance Bank IPO will contain 15.2 crores equities
• Pre-IPO promoter’s stake in the bank is 95.26 percent
• Important Equitas Small Finance Bank IPO dates are launching date October 20 and the closing date October 22, 2020
• The IPOs will launch in the price band of Rs 34-35 at face value of Rs 10 in a fixed value IPO offer
• The total issue size of Rs 532 crores consists of a total of Rs 280 crores in fresh shares and Rs 252 crores offer for sale scrips
• Allotment of shares under different categories encompasses 50 percent for QIBs, 35 percent for retail investors, 5 percent for employees, and 10 percent to existing shareholders
• Investors must bid for a minimum lot size of 450 shares
• Investors can bid for a minimum lot size of one and a maximum of thirteen
• The offer will open in both NSE and BSE

Equitas SBF has appointed JM Financial, Edelweiss Financial Services and IIFL Securities as book-running lead managers for the IPO offer.

Shareholders of Equitas Holding on October 11, 2020, are eligible to apply under stakeholder’s category. The company has reserved around 10 percent shares for existing shareholders that will allow them to apply for upto Rs 2 lakh worth of Equitas SBF IPO scrips.

The bank informed that it is going to meet its tier-1 capital requirement with the funds raised from the IPO offer.

How To Apply For Equitas SBF IPO

The online process has made it easy to apply for IPO offers. You can now login to your customer portal in broker’s website and select from available IPO offers. Select Equitas SBF IPO from the list and click on ‘apply’. Make payment choosing UPI has preferred payment method. The broker will block the bid on your behalf once the payment is through.

Or else, you can apply by downloading the ASBA form from the net-banking portal of your bank.

Conclusion

It is a good sign for the market to see the action back in the IPO market. When the IPO offer opens on October 20, it will be the twelfth IPO to make debut in this year, with the maximum of those offers launching in the last few months. So far, the IPO offers have received a mixed reaction from investors – some companies were oversubscribed and closed at a premium price, others received a tepid market reaction. Equitas Small Finance Bank IPO will be a good opportunity for other companies to check the market reaction.