Shares of Equitas Holdings Ltd. gained after its board approved a reverse merger with Equitas Small Finance Bank.
Shareholders will receive 226 shares of Rs 10 each of Equitas Small Finance Bank for every 100 shares of Rs 10 each of Equitas Holdings, according to their exchange filings. The merger is subject to regulatory approvals and that from the National Company Law Tribunal.
The board of Equitas Small Finance Bank, too, has approved the reverse merger.
As on March 31, Equitas Holdings had assets worth Rs 1,787 crore and a turnover of Rs 177.45 crore. Its net worth stood at Rs 1,784 crore, the filing said. In comparison, the small finance bank had an asset base of Rs 24,715 crore, a turnover of Rs 3,612.5 crore and a net worth of Rs 3,396 crore.
Equitas Holdings is a non-deposit taking, systemically important core investment company registered with the Reserve Bank of India. Its operations and activities are limited to investing in and providing loans to group companies. The holding company operates two subsidiaries — Equitas Small Finance Bank and Equitas Technologies Pvt. Ltd., engaged in the business of freight aggregation.
The RBI earlier this month had allowed holding companies to merge with small finance banks after the end of the five-year mandatory holding period. Equitas Holdings had then informed the bourses that the regulator had given an in-principle nod to proceed with the merger.
The Association of Small Finance Banks of India had made a representation to the RBI seeking prior in-principle approval for small finance banks to reverse merge with their respective holding companies on completion of initial five years from the date of commencement of business.
Ujjivan Small Finance Bank has also informed exchanges about an RBI in-principle approval for a merger with its holding company Ujjivan Financial Services.
Shares of Equitas Holdings rose 8%, the most since July 13, 2021, as of 11:10 a.m. on Tuesday. Shares of the small finance bank, too, rose as much as 3.6%.
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