Equitas Small Finance Bank (ESFB) that has been in news after the Reserve Bank of India (RBI) declined its request for an extension in listing deadline says it is currently awaiting the approval of the Securities and Exchange Board of India (SEBI) on a scheme of arrangement in relation to the listing of the shares of Equitas Small Finance Bank.
However, in case the scheme of arrangement does not get approved, ESFB intends to take immediate "steps for an IPO and get its shares listed as soon as possible". A senior representative from Equitas told Business Today that the company would brief its investors on the developments and discuss the way ahead in a conference call scheduled for Monday.
Equitas Holdings, the promoter of the Equitas Bank, holds 100 per cent shares in ESFB. The listed company, in a note to the Bombay Stock Exchange (BSE) last week, said that small finance banks with a capital base of over Rs 500 crore need to list within three years from commencement of operations and consequently, ESFB had to list on or before September 4, 2019. "Since Equitas Holdings is listed and ESFB is a wholly-owned subsidiary, it approached the regulator with a reverse merger proposal. As the regulator did not consent to this proposal, boards of EHL and ESFB had approved a scheme of arrangement wherein ESFB would capitalise its free reserves and issue shares of ESFB to the shareholders of EHL without cash consideration, in proportion to their holding in EHL. This scheme of arrangement was subject to approval from SEBI, RBI, NCLT, shareholders and creditors. ESFB had applied to Sebi for their approval of this scheme. Post such an approval, application to NCLT is required to be made for the remaining approvals," it said.
However, it clarifies that in case the scheme of arrangement does not get approved, ESFB will take immediate steps for an IPO and get its shares listed as soon as possible.
ESFB is a small finance bank licensed by Reserve Bank of India under Section 22 of the Banking Regulation Act, 1949. The bank commenced operations on September 5 in 2016. It describes itself as the "first private sector bank from Tamil Nadu to commence operations post Indian Independence". ESFB, with pan-India operations, is focussed on providing financing solutions for individuals and micro and small enterprises (MSEs) that are underserved by formal financing channels while providing a comprehensive banking and digital platform for all.