Equitas Small Finance Bank shares debut at Rs 31, a 6% discount to IPO price

The lukewarm debut was largely on expected lines given the tepid response to its public issue which was subscribed 1.95 times during October 20-22 and weak market conditions, experts feel.

Equitas Small Finance Bank shares failed to cheer investors on November 2 as it debuted at a 6 percent discount to its issue price.

The stock opened lower by 6.06 percent at Rs 31 on the BSE, while it was down 5.76 percent at Rs 31.10 at open on the National Stock Exchange, against issue price of Rs 33 per share.

At 10:03 hours IST, it was trading at Rs 30.50 on the BSE, down 7.58 percent with a volume of 4,35,351 equity shares, while on the National Stock Exchange, it was down 7.58 percent at Rs 30.50 with a volume of 31,15,858 equity shares.

It was largely on expected lines given the tepid response to its public issue which was subscribed 1.95 times during October 20-22 and weak market conditions, experts feel.

“While the operating environment remains challenging amid the COVID-19 pandemic, recent collection efficiency and moratorium position signal an improving trend. We remain positive on Equitas SFB given its diversified loan portfolio, well-managed asset quality, strong capital position, extensive distribution network and healthy growth prospects of the SFB industry,” Anand Rathi said.

Equitas Small Finance Bank raised nearly Rs 518 crore via public issue which comprised of a fresh issue of Rs 280 crore and an offer for sale of 7.2 crore equity shares by promoter Equitas Holdings.

The promoter has to reduce its shareholding in Equitas Small Finance Bank to 40 percent of its paid-up equity within five years from the commencement of its banking business.

In fact, the IPO of Equitas Small Finance Bank had come primarily as an effort by the management to meet with the listing norm of the RBI that calls for a mandatory listing of SFBs within three years from the date of reaching a net worth of Rs 500 crore.

This is the third small finance bank to list on the exchanges after Ujjivan Small Finance Bank and AU Small Finance Bank.

Equitas Small Finance Bank is one of the leading players in the small finance bank space in India, catering the mass market focused on “financially unserved and underserved segments” and committed to promoting financial inclusion in the country.

The company offers a diversified portfolio of products comprising small business loans, microfinance, vehicle finance, MSE finance, corporates and others.