The Rs 2,170-crore Initial Public Offering (IPO) by Equitas Holdings saw 17 times more demand than shares on offer, despite no participation by Foreign Institutional Investors (FIIs). The 139-million share offering saw 2,390 million bids worth around Rs 26,200 crore. Due to high pre-IPO shareholdings, FIIs were not allowed to participate in the issue. The first IPO by a licence holder of a small finance bank saw heavy demand from all investor categories. The IPO was also the biggest since InterGlobe Aviation’s Rs 3,000-crore IPO last October.
The Qualified Institutional Buyer (QIB) segment was subscribed nearly 15 times, led by mutual funds. The non-institutional or High Networth Individual (HNI) segment was subscribed over 57 times as several wealthy investors placed leveraged bets in anticipation of listing gains. The retail portion saw subscription of over 1.3 times, with nearly half a million applications.
After the IPO, FIIs will be able to buy shares of Equitas on listing as their ownership will come down from nearly 93 per cent currently to 35 per cent, creating space for further FII participation.
The Reserve Bank of India (RBI) has set an investment limit of 49 per cent for FIIs in a small finance bank.
Equitas had raised Rs 650 crore (30 per cent of the IPO size) from anchor investors by allotting 59.3 million shares at Rs 110 apiece. Axis Capital, Edelweiss Financial, HSBC Securities, and ICICI Securities, are the investment bankers handling the issue.