INSUBCONTINENT EXCLUSIVE:
Kolkata: Promoters of Equitas Small Finance Bank and Ujjivan Small Finance Bank have been exploring a reverse merger of their holding
Had the RBI allowed the reverse merger, promoter holding in small finance banks would have come down below 40 per cent
ET learnt that promoters of Equitas and Ujjivan were in talks with RBI on this issue for the past couple of months
The RBI diktat last week ended the dialogue.
In a filing to stock exchanges, Equitas said the company would consider at its next board
meetings the steps to get the shares of the small finance bank listed within the prescribed timelines, and a plan to approach the regulator
for an approval to merge with the bank at an appropriate time, after the lockin period
Promoters of both banks listed their respective holding companies even before they launched banking
Now, they will have to list their banks separately.
Analysts said that if the banking business is listed separately, the holding company
will have no business left and would trade at a discounted price
Interestingly, RBI allowed small finance banks to either be set up under holding companies or as standalone units
Out of eight microfinance-tuned-SFBs, four including ESAF and Vanarasi-based Utkarsh followed the holding company structure.
