Equitas Small Finance Bank IPO: What’s in store for long-term investors

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Chennai headquartered Equitas SFB acquired the license from RBI in 2016. Its total advances grew to Rs 15,923 crore from 10,781 crore between FY18 and FY20.

Synopsis

The IPO demands a lower valuation compared with peers including Ujjivan SFB and AU SFB. But, Equitas SFB has poorer asset quality largely due to higher loan loss in its vehicle finance segment.

ET Intelligence Group: Equitas Small Finance Bank (SFB) plans to raise Rs 280 crore through fresh issue of shares to boost its tier I capital. In addition, its promoter Equitas Holdings (EHL) will sell shares worth upto Rs 238 crore to reduce its stake to around 82% from the current 95.5%. This needs to further fall to 40% to abide by the regulatory requirements and may serve as a hangover on the stock after listing. The IPO demands a lower

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