Equitas Small Finance Bank (Equitas SFB) on Monday said it has filed draft red herring prospectus (DRHP) with the regulator SEBI for Rs 1,000 crore initial public offer. The Initial Public Offering (IPO) comprises a fresh issue aggregating up to Rs 550 crore and an offer for sale of up to 80,000,000 equity shares by Equitas Holdings Limited (EHL), the promoter, Equitas Small Finance Bank said in a statement quoting DRHP.
The offer includes a reservation of up to Rs 100 crore for subscription by eligible EHL shareholders and a reservation aggregating up to Rs 5 crore for subscription by eligible employees, it said.
"In terms of the RBI In-Principle Approval, RBI Final Approval and SFB Licensing Guidelines, the Bank is required to list its equity shares on the Stock Exchanges within three years from the date of commencement of business by the bank," it said.
The bank proposes to utilise the net proceeds from the offer towards augmenting Tier I capital base and to meet future capital requirements.
In September after the small bank failed to be listed within the stipulated timeframe as per the licence agreement, the banking regulator, Reserve Bank of India (RBI), refused to extend the listing deadline for Equitas SFB and barred it from opening new branches till further orders.
The regulator also froze the pay of CEO Vasudevan PN. RBI rules mandate that a small finance bank should list within three years of reaching Rs 500-crore net worth.
Although the RBI directive does not have a major implication on the business, the bank will be forced to list by March 2020.
Equitas SFB have been able to diversify their loan portfolio and significantly reduce dependence on microfinance business as compared to other microfinance companies that have converted to SFBs, it said.
The equity shares will be listed on BSE and NSE, it said.