Equitas Holdings gets nod for IPO
The microfinance institution, which in September received in-principle approval from RBI for launching a small finance bank, aims to raise almost Rs2,000 crore
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Mumbai: Chennai-based Equitas Holdings Ltd has received the go-ahead from the Securities and Exchange Board of India (Sebi) for its initial public offering, according to the capital market regulator’s website.
The microfinance institution, which in September received in-principle approval from the Reserve Bank of India (RBI) for launching a small finance bank, aims to raise almost Rs.2,000 crore as foreign investors in the company are looking to sell their stake to ensure compliance with RBI’s ownership norms.
According to the draft red herring prospectus filed by Equitas, the share sale comprises a primary issuance of Rs.600 crore and an offer for sale by its existing investors.
Investors who are selling part of their stake as part of the offer for sale include the International Finance Corp., part of the World Bank group, Sequoia Capital, Dutch development finance institution FMO, Helion Venture Partners, Aavishkaar, India Financial Inclusion Fund, Westbridge Ventures, Lumen Investment Holdings and Aquarius Investments.
Equitas’s founder P.N. Vasudevan is also selling a part of his holding in the company.
Collectively, these funds hold 67.53% stake in the company. Vasudevan holds a 3.17% stake in the firm. Overall, foreign shareholding in Equitas stood at 93% as on 31 March 2015.
On 16 September, RBI issued small finance bank licences to 10 applicants, including Equitas. Other organizations that won small bank licences include Ujjivan Financial Services Pvt. Ltd, Janalakshmi Financial Services Pvt. Ltd, Au Financiers (India) Ltd and Disha Microfin Pvt. Ltd.
Ujjivan Financial Services too has filed draft IPO papers with Sebi and is waiting for its approval.
As of now, Equitas’ main business is microfinance. The company also offers other services such as housing finance, vehicle finance, loans against property and business loans to small and medium enterprises.
Equitas’s revenue increased 56% to Rs.755.9 crore in 2014-15 from Rs.483.5 crore in the previous year. In the last fiscal year, Equitas reported a net profit of Rs.106.6, an increase of 44% over the previous year’s profit of Rs.74.1 crore.
Equitas’ assets under management (AUM) jumped by more than 60% in 2014-15 to Rs.4,010 crore from Rs.2,485 crore a year ago. Its microfinance business was the biggest contributor with an AUM of Rs.2,144 crore. The company disbursed fresh loans of Rs.3,606 crore in 2014-15.
Sebi on Monday also approved the IPO of auto components maker GNA Axles. In 2015, 21 firms raised almost Rs.13,600 crore through the IPO route, according to data from Prime Database, a primary market tracker.
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