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Nirmal Bang Report
Equitas Small Finance Bank Ltd. recently raised Rs 5.5 billion through qualified institutional placement to meet minimum public shareholding requirement, resulting in 9% equity dilution.
Post QIP, the promoter shareholding (Equitas Holdings Ltd.) has dropped to 74.7% and the board has approved the Scheme of Amalgamation between Equitas Holdings and Equitas SFB (swap ratio of 2.31 shares of Equita SFB for one share in Equitas Holdings).
The reverse merger is likely to be completed between December 2022 and Mar 2023.
We recently hosted Equitas SFB for a client interaction and the key takeaways from our call are:
credit demand is picking up across products and the management remains upbeat about achieving 25-30% assets under management growth in FY23E,
collections remain strong and incremental flow into delinquencies from the standard book has normalised,
some pain is visible in the restructured book in micro finance and used commercial vehicle portfolios.
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