We should be in time for April 2017 deadline: P N Vasudevan

Interview with Managing director, Equitas Holdings

Chennai-based micro finance lender Equitas Holdings initial public offering (IPO) got fully subscribed on the third and final day of the bidding. The Rs 2,170-crore offering saw 17 times more demand than shares on offer, despite no participation by foreign institutional investors (FIIs). P N Vasudevan, managing director, told T E Narasimhan that subscription numbers was good and he is confident on commencing small finance bank before the April 2017 deadline. He speaks on opportunities and challenges.

Are you happy with the response (for IPO)?

Subscription was 17 times the offer, a pretty good number. IPO was one of the conditions for the SFB (small finance bank) licence. Now, we have to work on the other conditions to get ready for the final application for licence.

Was it regulation pressure which made you go for an IPO or did you really want to?

We had foreign holding of 93 per cent, which has to be 49 per cent according to the regulation. For that, we needed an IPO.

What will be the next step for Equitas towards an SFB licence?

Now, we have to merge the three subsidiaries — Equitas Micro Finance, Equitas Finance and Equitas Housing. Once we get the court’s nod, we will work on I-T-related issues. We have till April 2017 to commence operations. We should be in time.

What is your target for the SFB? In the next two to three years, where do you see the SFB? What are the challenges do you foresee?

I don’t want to give any numbers and forward-looking statements. On the assets side, we are well diversified and that will continue, with a few additional products. Otherwise we have complete credit products in the offering.  The challenge would be setting up the liability team, since we need to mobilise deposits.

Analysts say the challenge would be the current product offerings and expansion. What is your view?

We are fairly well diversified. Among our products, around 53 per cent are for micro finance, 25 per cent for commercial vehicles, and 17 per cent for MSME and five per cent for affordable housing.

We operate in 11 states and are comfortable with that.

What will be the new SFB’s focus?

An SFB gives us an opportunity to offer liability services to  retail clients. As we set out to do that, there are lot of segments in the population which are not finding it easy, convenient or comfortable to do banking for low-value transactions. While we will do many other things, one of the things we will focus on is how to give a comfortable and convenient banking process for such transactions.