Equitas Holding (EHL) took a knock of about 10 percent in the morning trade that pushed its share price to an intraday low of Rs 104.40 on the BSE on September 9 after it proposed a new scheme to list its Equitas Small Finance Bank (ESFB).
Last week, EHL’s small financing bank arm was denied an extension to the listing deadline by the RBI as well as approval to reverse merger proposal by the SEBI.
Under the new scheme, EHL proposes to capitalise free reserves of ESFB and issue shares of the subsidiary to its shareholders without cash consideration.
The RBI regulations required ESFB to be listed on capital markets on or before September 4 and have a networth of Rs 500 crore.
EHL had also approached SEBI with a reverse merger proposal but the market regulator turned down the request.
“As the regulator did not approve the proposal, the boards of EHL and ESFB approved a scheme of arrangement,” EHL said in a regulatory filing.
This scheme of arrangement is subject to approval from SEBI, RBI, NCLT, shareholders, and creditors.
According to a Sharekhan report, sentimentally, it is negative for EHL. “EHL is the promoter and holding company of ESFB and was required by the RBI to get ESFB listed on or before September 4, 2019,” it said.