With new RBI norms, investors need to be cautious about small finance arms

Overhang for Equitas and Ujjivan is listing of small finance arms

With the Reserve Bank of India set to open up the small finance banking space for more players soon, investors will be flooded with more options, thanks to the mandatory listing norms for SFBs. 

Among the current entities, Equitas and Ujjivan are required to list their SFBs by September 2019 and February 2020, respectively. While this will not only amount to a dual listing, but also be a litmus test to gauge investors’ interest in these stocks and the valuations they are willing to pay for this sector. 

Brokerages such as UBS and Nomura have turned positive on SFBs ahead of the