IPO price band set at Rs 109-110 per share
The initial public offer (IPO) of Chennai-based micro finance lender Equitas Holdings opens for bidding on Tuesday, 5 April 2016. The IPO comprises of fresh issue of shares aggregating up to Rs 720 crore and offer for sale of up to 13.24 crore equity shares by existing shareholders. The price band for the IPO has been set at Rs 109-110 per share. Bidding for the IPO through the book-building route concludes on Thursday, 7 April 2016.
Among the selling shareholders, International Finance Corporation (IFC) is selling 1.64 crore shares and another development finance institution Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) is selling 1.19 crore shares. Aavishkaar Goodwell India Microfinance Development Company is selling about 50 lakh shares, Aquarius Investments is selling 71.53 lakh shares, Creation Investments Equitas Holdings, LLC is selling 8.68 lakh shares, Helion Venture Partners II LLC is selling 42.88 lakh shares, India Financial Inclusion Fund is selling 2.59 crore shares, Lumen Investment Holdings is selling 2.25 crore shares, MVH S.p.A. is selling 1.69 crore shares, Sarva Capital LLC is selling 66.35 lakh shares, Sequoia Capital India Investments III is selling 1.28 crore shares and WestBridge Ventures II, LLC is selling 15.83 lakh shares. Equitas Holdings Managing Director P.N. Vasudevan is selling 1.8 lakh shares via the IPO.
Equitas Holdings intends to use the proceeds of the fresh issue to augment the capital base of its three wholly owned subsidiaries which are engaged in the business of micro finance, vehicle finance and MSE (micro and small enterprises) finance and housing finance. Equitas Holdings will pump in Rs 288 crore each in Equitas Micro Finance (EMFL) and Equitas Finance (EFL) and Rs 40 crore in Equitas Housing Finance (EHFL). EMFL is a wholly owned subsidiary of Equitas Holdings and is involved in the business of micro finance lending. EFL is a wholly owned subsidiary of Equitas Holdings and is involved in the business of providing vehicle finance and MSE finance. EHFL is a wholly owned subsidiary of Equitas Holdings and is involved in the business of providing housing finance.
Equitas Holdings is a diversified financial service provider focused on individuals and micro and small enterprises (MSEs) that are underserved by formal financing channels. The company offers a range of financial products and services including microfinance, used commercial vehicle finance, MSE finance and housing finance. The focus customer segment includes low-income groups and economically weaker individuals operating small businesses, as well as MSEs with limited access to formal financing channels.
As on 31 December 2015, Equitas Holdings' operations were spread across 11 states, one union territory and the NCT of Delhi with a total of 539 branches. Equitas Holdings has received in-principle approval from the Reserve Bank of India (RBI) to set up a small finance bank (SFB). The company intends to leverage its large branch network and large customer base across India to develop SFB operations.
Based on consolidated financials, Equitas Holdings reported net profit of Rs 120.36 crore on revenue from operations of Rs 791.34 crore for 9 months ended December 2015. The company reported net profit of Rs 106.62 crore on revenue from operations of Rs 755.06 crore for the year ended 31 March 2015 (FY 2015).
The company's gross non-performing assets (NPA) as a percentage of On-Book assets under management (AUM) stood at 1.33% as on 31 December 2015. The net NPA stood at 0.97% as on 31 December 2015.
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