On Monday, shares of Equitas Small Finance Bank were trading at a discount of 6.06 per cent at Rs 31 from its issue price of Rs 33.
The IPO of small financing bank (SFB) was subscribed 1.95 times in the three-day bidding process from 20-22 October, which is much less when compared with the issues that hit the market prior to it. The high net worth individual (HNI) quota of the offering remained undersubscribed at 22 per cent. At the issue price, the shares were valued at 1.3 times trailing 12-month price to its book value.
Thus, the IPO had not drawn higher subscription level due to the further stake reduction of promoters for meeting RBI’s regulatory requirements. As per the RBI’s rule, Equitas Holdings Ltd. requires to pare stake in the SFB for up to 40 per cent by September 2021, after completing its five years of operations.
In December 2019, Peer Ujjivan Small Financing Bank which got listed at a huge premium and currently, it is trading below its issue price that was another reason for investors to turn off.