Equitas Holdings IPO subscribed 17.21 times

Receives bids for 239.59 crore shares

The initial public offer (IPO) of Equitas Holdings ended on 7 April 2016 with bids for a total of 239.59 crore shares, compared with 13.91 crore equity shares on offer, as per data from the National Stock Exchange (NSE) website. The IPO was subscribed 17.21 times.

The qualified institutional buyers (QIBs) category was subscribed 14.93 times. The non-institutional investors category, made up of high net worth individuals, was subscribed 57.29 times. The retail individual investors category was subscribed 1.40 times.

Equitas Holdings raised Rs 652.18 crore by selling 5.92 crore shares to a total of 63 anchor investors ahead of the opening of the company's IPO. The shares were allotted to the anchor investors at Rs 110 per share, the top end of the Rs 109 to Rs 110 per share price band for the IPO.

Among the anchor investors, PI Opportunities Fund I will be allotted 53.60 lakh shares, HDFC Standard Life Insurance Company will be allotted 36.34 lakh shares, ICICI Prudential Banking and Financial Services Fund will be allotted 23.99 lakh shares. Other investors include, Franklin Templeton Asset Management (India), Tata AIA Life Insurance Co, Sundaram Asset Management Co, Birla Sunlife Trustee Co and SBI Funds Management, among others.

The IPO of Chennai-based micro finance lender Equitas Holdings opened for bidding on Tuesday, 5 April 2016. The IPO comprises of fresh issue of shares aggregating up to Rs 720 crore and offer for sale of up to 13.24 crore equity shares by existing shareholders. The price band for the IPO has been set at Rs 109-110 per share. Bidding for the IPO through the book-building route concludes today, 7 April 2016.

Equitas Holdings intends to use the proceeds of the fresh issue to augment the capital base of its three wholly owned subsidiaries which are engaged in the business of micro finance, vehicle finance and MSE (micro and small enterprises) finance and housing finance. Equitas Holdings will pump in Rs 288 crore each in Equitas Micro Finance (EMFL) and Equitas Finance (EFL) and Rs 40 crore in Equitas Housing Finance (EHFL). EMFL is a wholly owned subsidiary of Equitas Holdings and is involved in the business of micro finance lending. EFL is a wholly owned subsidiary of Equitas Holdings and is involved in the business of providing vehicle finance and MSE finance. EHFL is a wholly owned subsidiary of Equitas Holdings and is involved in the business of providing housing finance.

Equitas Holdings is a diversified financial service provider focused on individuals and micro and small enterprises (MSEs) that are underserved by formal financing channels. The company offers a range of financial products and services including microfinance, used commercial vehicle finance, MSE finance and housing finance. The focus customer segment includes low-income groups and economically weaker individuals operating small businesses, as well as MSEs with limited access to formal financing channels.

As on 31 December 2015, Equitas Holdings' operations were spread across 11 states, one union territory and the NCT of Delhi with a total of 539 branches. Equitas Holdings has received in-principle approval from the Reserve Bank of India (RBI) to set up a small finance bank (SFB). The company intends to leverage its large branch network and large customer base across India to develop SFB operations.

Based on consolidated financials, Equitas Holdings reported net profit of Rs 120.36 crore on revenue from operations of Rs 791.34 crore for 9 months ended December 2015. The company reported net profit of Rs 106.62 crore on revenue from operations of Rs 755.06 crore for the year ended 31 March 2015 (FY 2015).

The company's gross non-performing assets (NPA) as a percentage of On-Book assets under management (AUM) stood at 1.33% as on 31 December 2015. The net NPA stood at 0.97% as on 31 December 2015.

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