Chennai-based Equitas Small Finance Bank (ESFB) has reduced the size of its initial public offering (IPO) from Rs 550 crore to Rs 280 crore. It has also reduced the offer-for-sale of size from 8 crore equity shares to 7.2 crore.
Equitas Holdings (EHL), the parent company of ESFB, in a regulatory filing to the stock exchanges said following the relaxation permitted by Sebi, its subsidiary has filed an addendum to its DRHP, revising its offer size for the proposed IPO.
The company has also reduced the EHL shareholder reservation portion from Rs 100 crore to Rs 51 crore and the employee reservation portion from Rs 5 crore to Rs 1 crore.
ESFB had filed the draft red herring prospectus (DRHP) with the Sebi for its IPO in December 2019, and the issue was expected to hit the markets before the end of March 2020. However, the Covid has delayed the IPO process.
ESFB began operations on September 5, 2016 and it was supposed to get listed by September 4, 2019. The RBI rules mandate that an SFB must be listed within three years of reaching Rs 500-crore net worth.
Since EHL, the holding company, is listed and ESFB is a wholly owned subsidiary, EHL approached the RBI with a reverse merger proposal. As the regulator did not agree to it, the boards of EHL and ESFB had cleared a scheme of arrangement and applied to Sebi for approval.
In the meantime, the RBI had refused to extend the deadline for ESFB listing and the banking regulator said the bank cannot open new branches till further orders. The RBI also said the bank had violated listing norms and the remuneration of MD and CEO will stand frozen at existing levels.
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