Equitas Holdings Ltd, the holding company for the fifth-largest microlender in the country that made a blockbuster debut on the stock market last week, said on Friday it has got the formal licence from RBI to operate a small finance bank.
Last September, the Indian central bank had given 'in-principle' nod to 10 of 72 applicants to start small finance banks, a new category of lenders allowed by the central bank to push financial inclusion in the country. Those selected include eight microfinance institutions—Janalakshmi Financial Service, Disha Microfin, ESAF Microfinance and Investments, RGVN (North East) Microfinance, Suryoday Micro Finance, Ujjivan Financial Services and Utkarsh Micro Finance, besides Equitas Holdings. PE-backed non-banking finance company (NBFC) AU Financiers and Jalandhar-based Capital Local Area Bank also got in principal approval.
Early this week, Capital Small Finance Bank Ltd (erstwhile Capital Local Area Bank Ltd) started operations as a small finance bank.
Equitas is the first of the 10 to go public and had a stellar listing. It is currently trading at around 27% premium to the issue price. It commands a market valuation of Rs 4,700 crore ($708 million).
Equitas is a holding company and operates through three subsidiaries. The units are engaged in microfinance lending and also offer mortgage loans, vehicle loans and loans to micro and small enterprises.
Its peer group microlender Ujjivan Financial Services that also holds the in-principle approval to run small finance bank is currently in the market with its initial public offer (IPO).
Two other listed microlenders are SKS Microfinance Ltd, which went public in 2010, and Satin Creditcare.