Equitas Holdings tumbles after RBI declines request to extend listing deadline for SFB

Equitas Holdings (EHL) slumped 5.04% to Rs 110.15 after Reserve Bank of India (RBI) denied to extend deadline for its subsidiary Equitas Small Finance Bank (ESFB), to get listed at the bourses.

As per the rules of the RBI, small finance banks, having a capital base of over Rs 500 crore, have to list within three years from commencement of operations. ESFB, therefore, had to get listed on or before 4 September 2019. Subsequent to the deadline being lapsed, an extension was requested, which was denied by the central bank.

As a punitive measure, RBI said that the bank is not permitted to open new branches till further notice and froze the remuneration of managing director and chief executive officer of the bank stands frozen at the existing level till further notice. RBI added that further restrictions may be imposed if the bank fails to make satisfactory progress towards listing of its shares.

EHL also approached Sebi with a reverse merger proposal but the regulator turned down the request.

Subsequently, the boards of EHL and ESFB approved a scheme of arrangement wherein, ESFB would capitalize 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. In case the scheme of arrangement does not get approved, ESFB would be taking immediate steps for an IPO and get its shares listed as soon as possible.

Meanwhile, the S&P BSE Sensex was down 2.34 points or 0.01% to 36,979.43.

On the BSE, 4.85 lakh shares were traded in the counter so far compared with average daily volumes of 2.18 lakh shares in the past two weeks. The stock hit a high of Rs 110.6 and a low of Rs 104.4 so far during the day.

The stock hit a 52-week high of Rs 158 on 07 Sep 2018. The stock hit a 52-week low of Rs 78 on 26 Oct 2018.

Equitas Holdings is a non-deposit taking systemically important - core investment company. The activity of the Company is making investment in subsidiary companies and providing loans to them. Equitas Small Finance Bank and Equitas Technologies are the subsidiaries of the company.

On a consolidated basis, Equitas Holdings' net profit rose 139.1% to Rs 70.27 crore on a 24.8% increase in the total income to Rs 665.04 crore in Q1 June 2019 over Q1 June 2018.

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