Equitas Holdings on losing streak

Equitas Holdings is among the top five losers on the BSE today; it opened 10% lower at Rs.104.40. Though it has recovered from this intraday low, it remains firmly in the red.

Equitas Small Finance Bank (ESFB), a subsidiary of Equitas Holdings  could not be listed within the deadline stipulated by RBI. And last week, RBI refused the company’s proposal seeking an extension of the listing deadline - on or before September 4, 2019 and barred it from opening new branches and put a freeze on the remuneration of its MD & CEO.

The company has now proposed a new scheme to list ESFB under which it proposes to capitalise free reserves of ESFB and issue shares of the subsidiary to its shareholders without cash consideration, in proportion to their holding in Equitas Holding.

This Scheme of Arrangement is 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, the company has said that ESFB would be taking immediate steps for an IPO and get its shares listed as soon as possible.

The market is not happy with this development as the delay in listing is not being perceived positively.