Lost count of initial public offers that went live in September? Don’t worry, we’ll keep you updated on all the IPOs that hit the market in the months ahead. The latest one to go live is Equitas Small Finance Bank. Here’s all you need to know about this IPO.
Issue opens: 20 October 2020
Issue closes: 22 October 2020
Price range: ₹32–33
IPO size: ₹517.6 crore
Lot size: 450
Founded originally as V.A.P. Finance Private Limited in 1993, Equitas Small Finance Bank is the largest small-finance bank in India in terms of the number of banking outlets. It gained its small-finance bank status from the RBI in 2016. As of 30 June 2020, the bank’s distribution network comprises 856 banking outlets and 322 ATMs across 17 states and union territories in India. Further, it is the country’s second-largest small finance bank in terms of assets under management and total deposits.
SFBs cater to the low-income segment and have an opportunity to offer them with various products and services. However, the cash crunch due to the pandemic has posed a challenge to the small finance banking sector. In this regard, Equitas Small Finance Bank stands out from its peers because of a diversified portfolio. Where most small finance banks focus on the microfinance businesses, Equitas offers housing loans, agriculture loans, commercial vehicle loans, gold loans, and MSE loans to name a few.
Its revenue from operations stood at ₹1,786 crore (FY18), ₹2,275.3 crore (FY19) and ₹2,890.1 crore (FY20). Meanwhile, profits amounted to ₹31.3 crore (FY18), ₹176.5 crore (FY19) and ₹205.9 crore (FY20) respectively.
The IPO ₹517.6 crore has two parts: a fresh issue, and an offer for sale. As part of the fresh issue, the company will raise ₹280 crore to expand its operations. Meanwhile, the rest of the money raised in the IPO will be utilised in the offer for sale. The issue opens with a price band of ₹32–33 and lot size of 450 shares.
How to apply
Select the IPO you want to apply for from the list of open issues. Enter your correct UPI ID and select the investor type. The quantity should be a multiple of the lot size. If you wish to apply at the cut-off price, simply click on the checkbox next to ‘Cut-off price’. You will receive an SMS from the NPCI confirming your bid and requesting you to accept the mandate on your UPI app. We have noticed a significant delay in UPI payment SMS/notifications from NPCI. Request you to be patient. Please ignore this message if you’ve accepted the mandate.
How to check your IPO allocation
The Equitas Small Finance Bank IPO allotment status will be available on or around 28 October 2020. The allotted shares will be credited in the Demat account by 30 October 2020. The status-check link is not activated by the registrar yet. We will provide you with the link as soon as the registrar makes it live. This may happen after the IPO is closed (after 22 October 2020).