Chennai-based Equitas Small Finance Bank will explore both acquisition and block deals on the bourses to comply with the Reserve Bank of India’s guidelines of lowering promoter holding to 40 per cent.
After completing four years of operation, the bank has come out with a revised public offer of a little over Rs 500 crore, almost half of the previous offer of Rs 1,000 crore.
The promoter holding would come down to around 82 per cent following the offer that runs from October 20-22. The holding company has a 95.49 per cent stake in the bank.
The bank has to further lower its holding company’s stake and is exploring different ways of the same.
“There are two routes we are looking at. A potential merger and acquisition which will dilute the holding company’s shares and the other route is a block sale by the holding company,” said P.N. Vasudevan, managing director, Equitas Small Finance Bank.
Vasudevan said there were two reasons as to why the bank reworked and reduced the issue size. First, the bank is comfortable with a capital adequacy of around 21 per cent. The current economic and market condition is the other reason.