Equitas, Ujjivan small finance banks: Long-standing demand may soon be met

Recommendation on collapsing the holding company could simplify the structure and help reduce promoter stake in the banks

After two years of multiple representations and listing their small finance bank (SFB) arms, there could be some respite for Equitas and Ujjivan — their SFBs and holding companies. With the Mohanty Committee on Friday (post market hours) recommending that a holding company (holdco) model need not be mandatory for all banks, the two SFB stocks rose sharply in Monday’s trade, up 12-20 per cent. They may gain on two counts, should the committee’s recommendation be approved.

First, this allows for a collapse of the holdco and SFB, though analysts at Kotak Institutional Equities say the process could still require these