Ujjivan Financial and Equitas Holdings are among the top five gainers on the BSE with both hitting the 20% UC – Ujjivan at Rs.244.90 and Equitas at Rs.138.40.
The stocks are up after RBI approved, Equitas Holdings, the promoter of Equitas Small Finance Bank to amalgamate the promoter into itself.
According to SFB Licensing Guidelines, a promoter of Small Finance Bank can exit or cease to be a promoter after the mandatory initial lock-in period of five years depending on the RBI’s regulatory and supervisory comfort and SEBI Regulations in this regard at that time.
In case of Equitas Small Finance Bank, the said Initial Promoter Lock-in for the company expires on September 4, 2021. Hence, the bank had requested the RBI if a Scheme of Amalgamation of the company with the bank, resulting in exit of the promoter, can be submitted to RBI for approval, prior to the expiry of the said five years, to take effect after the Initial Promoter Lock-in expires.
This amalgamation scheme is expected to give an exit route to the promoters and trim down the holding company structure – Equitas’s holding has to be brought down from 82% and that of Ujjivan from 83% to less than 40% by 4th Sept 21st and 31st Jan 22 respectively.