Shares of Equitas Holdings and Ujjivan Financial Services suffered massive selling pressure Friday, tumbling up to 23 per cent.
The sharp fall in these stocks came amid the RBI reiterating that their small finance banks should be listed within three years from the date of commencement of operations.
Shares of Equitas Holdings cracked 23.34 per cent to settle at Rs 99.05 on BSE. Intra-day, the stock slumped 39.62 per cent to Rs 78 -- its 52-week low.
The scrip of Ujjivan Financial Services also tanked 17.62 per cent to end at Rs 181.15. During the day, it nosedived 24.14 per cent to Rs 166.80 -- its one-year low level.
As per a BSE filing by Equitas Holdings Thursday, the RBI while granting approval to the company to establish a small finance bank, vide its letter dated June 30, 2016, had stipulated that the bank should be listed within three years from the date of commencement of operations.
"In our instance, the shares of company's wholly owned subsidiary company viz Equitas Small Finance Bank Limited (ESFBL) are required to be listed with stock exchanges by September 4, 2019," it said.
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ESFBL has received a letter dated October 24, 2018 from RBI wherein the central bank has advised it to comply with all the requirements of the guidelines for licensing of small finance banks.
Also, it is required to maintain the promoter shareholding in the bank to at least 40 per cent for a period of five years from the date of commencement of business, that is by September 4, 2021.
Boards of Equitas Holdings and Equitas Small Finance Bank (ESFBL) will meet next month to finalise steps for listing of the lender to meet the RBI regulations.
They will also decide on approaching the RBI for an approval to merge Equitas Holdings with the bank at an appropriate time, post the lock-in period, it said.
Meanwhile, Ujjivan Financial Services, in regulatory filing, said it too would consider all appropriate measures to ensure the timely compliance of RBI directives regarding Ujjivan Small Finance Bank, which has to get listed by January 31, 2020.