Equitas Holdings, Ujjivan Financial plunge18-23% after RBI asks separate listing of small finance banks

Indian Bank

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Shares of Equitas Holdings and Ujjivan Financial Services fell 18-23 percent on Friday as investors turned wary of RBI’s letter to the entities on listing of small finance banks.

The central bank reiterated in its letter to the banks that promoters of small finance banks should list their banking units separately within three years of operation. This is as per the central bank’s licensing requirements for small finance banks.

Both Ujjivan and Equitas told exchanges that the RBI had reiterated this rule along with maintaining promoter shareholding at 40 percent for a five-year period.

“The Bank and the Company are committed to consider all appropriate measures to ensure the timely compliance of the above directives of the RBI, while ensuring the long term interests of the shareholders of the Company are maintained,” Ujjivan Financial Services said in an exchange filing.

In view of the said regulatory requirement, the Boards of Equitas Small Finance Bank and the Company would be considering the following, in their ensuing Board Meetings scheduled on November 1, 2018 and November 2, 2018, respectively.

1. Further steps to get the shares of ESFBL listed within the prescribed timelines; and

2. Approaching RBI for an approval to merge with the Bank at appropriate time, post the lock-in period

Macquarie believes that the move is negative for Ujjivan Financial as an IPO of small finance bank will result in dual listing and attract a holding company discount. It highlighted that due date for Ujjivan is January 2020 and for Equitas is September 2019.

Further, it added that the stock could fail to attract new buyers if the small finance entity lists separately. It added that the stock is now suitable for truly long-horizon investors willing to ride out this hoopla.

The management of Equitas Small Finance Bank told CNBC-TV18 that it is required to dilute 60 percent in five years and will be listing the bank separately as per RBI’s reply. It also said that it will have to hold minimum 40 percent in the listed entity initially.