Markets regulator Sebi has provided relaxation with regard to the minimum promoter lock-in norm to Ujjivan Small Finance Bank (SFB) and its promoter Ujjivan Financial Services, for the purpose of their amalgamation. On October 30, the bank had approved the scheme of amalgamation between Ujjivan Financial Services (transferor company) and Ujjivan SFB (transferee company).
Following this, it had submitted a joint application on behalf of the transferor/promoter to Sebi, seeking relaxation of the three-year minimum promoter lock-in requirements. Besides, it also sought approval to adopt the proposed scheme of amalgamation as a method to achieve the minimum public shareholding.
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"…we hereby inform you that the Sebi, vide its letter dated December 2, 2021, has acceded to our request to relax the three-year minimum promoter lock-in requirements," it said in a regulatory filing. The exemption is subject to no-objection certificate (NOC) from the exchanges and final approval by the National Company Law Tribunal (NCLT).
"The exemption being granted from lock-in is only for the period commencing after approval of the proposed scheme of amalgamation by NCLT and till expiry of the lock-in period," it said citing the Sebi letter. However, the Sebi specified that the relaxation is granted to them for the "specific purpose of scheme of amalgamation" between Ujjivan Financial Services and Ujjivan SFB and "shall not be treated as a precedence".
Further, as advised by Sebi, the bank will initiate necessary steps to ensure compliance with minimum public shareholding requirements through mode specified under Sebi circular dated February 22, 2018, it added. Currently, Ujjivan Financial Services holds 83.32 per cent of the equity shareholding and 100 per cent of preference shareholding of Ujjivan SFB.
As per the minimum shareholding norms, the promoter's minimum initial contribution in the SFB arm should be at least 40 per cent. If the promoter's initial shareholding in the SFB is in excess of 40 per cent, it is to be brought down to 40 per cent within a period of five years from the date of commencement of operations of SFB. This period of five years is expiring on January 31, 2022.
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