Small finance banks move to IPO Street

Ujjivan IPO to raise Rs 900 crore, impressive debut by Equitas

April 22, 2016 12:00 am | Updated 05:41 am IST

icro-lender Ujjivan Financial will hit the capital markets to raise about Rs 880 crore which constitutes a fresh issue of shares for Rs. 358.16 crore and the rest from an offer for sale of over 2.49 crore equity shares to existing shareholders.

The initial public offer will open on 28 April in a price band of Rs 207 to Rs 210. The Bengaluru-based lender had raised Rs 292 crore from a pre-IPO placement in February.

The issue will help the lender to reduce its foreign shareholding to 44 per cent from 77 per cent now, said Samit Ghosh, managing director and chief executive officer, Ujjivan, which has received a licence to start a small finance bank.

RBI norms

According to RBI norms, foreign shareholding in such entities should be less than 49 per cent.

“We are planning to start operations in the first quarter of 2017. Initially, about 40 per cent of our existing 470 branches will be converted to bank branches,” Mr Ghosh said.

Equitas Holdings, another lender which received a licence to operate as a small finance bank, made an impressive debut on the bourses on Thursday.

On the National Stock Exchange (NSE), the shares opened at Rs.145.10 and rose further to touch an intra-day high of Rs.147.

The shares touched a low of Rs.135 before closing at Rs.135.60, 23.27 per cent higher than the issue price of Rs.110. On the BSE, the shares closed at Rs.135.25.

As per the closing price, the market capitalisation of the small finance bank is pegged at Rs.4,535.95 crore.

Incidentally, the market capitalisation of SKS Microfinance is Rs.7,343.94 crore.

The public issue of Equitas comprised a fresh issue of around 6.6 crore shares and an offer for sale by existing shareholders of 13.2 crore shares.

The price band for the offer was fixed between Rs.109 and Rs.110.

Top News Today


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.