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Equitas Holdings IPO gets off to a slow start

05 April, 2016

The initial public offering of Chennai-based Equitas Holdings Ltd, the holding firm for the fifth-largest microlender in the country, began on a slow note on Tuesday with subscriptions touching only 9 per cent on the first day.

Subscription was led by retail investors, who bid for about 17 per cent of their portion of the issue. Non-institutional investors bid for around 1.7 per cent of the quota reserved for them, while qualified institutional buyers mostly stayed away, stock-exchange data show.

Ahead of the IPO, the company raised Rs 653 crore from 16 anchor investors by allotting 5.93 crore shares at Rs 110 each, the upper end of the price band.

Anchor investors include Wipro chairman Azim Premji’s private investment arm PremjiInvest. A host of mutual funds and insurance firms including Franklin Templeton MF, Birla Sun Life Trustee Co, SBI MF, UTI MF, ICICI Prudential MF, Kotak Mahindra MF, HDFC Standard Life Insurance, Birla Sun Life Insurance, Sundaram MF, Tata AIA Life Insurance, Reliance Life Insurance and Ambit Alpha Fund were the other anchor investors.

Equitas had earlier changed the terms of its IPO. The firm is seeking to become the second microlender to go public after SKS Microfinance listed on the bourses in 2010.

The firm is looking to raise as much as Rs 720 crore through a fresh issue of shares besides an offer for sale by a bunch of its private investors and founder PN Vasudevan. In its draft prospectus filed with capital markets regulator SEBI last October, Equitas had sought to raise up to Rs 600 crore.

Of the total money to be raised through the fresh issue of shares, the company plans to use over Rs 600 crore towards investment in subsidiaries to augment their capital base.

Equitas is essentially 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.

Edelweiss, ICICI Securities, Axis Capital and HSBC are the merchant bankers for the IPO. 


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Equitas Holdings IPO gets off to a slow start

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