DSP Mutual Fund schemes to acquire 9.99% stake in Equitas SFB, RBI gives nod

“we would like to inform you that the Bank has received an intimation from RBI on November 16, 2022, that it has granted its approval to M/s DSP Investment Managers Private Ltd (DSPIM) to acquire up to 9.99% of the paid-up equity capital of the Bank through the schemes of DSP Mutual Fund (DSPMF),” the company informed in an exchange filing.

The proposed acquisition of shares by DSPIM would be consequent to the Scheme of Amalgamation of Equitas Holdings Limited with the Bank taking effect.

In March this year, thee board of Equitas SFB approved a new scheme of amalgamation between Equitas SFB and the promoter/holdco, Equitas Holdings Ltd (both listed entities), mainly to meet the promoter holding norms in ESFB.

Notably, the holdco structure was voluntarily created to meet the RBI’s norms regarding promoter holdings in Equitas SFB. The Reserve Bank of India (RBI) had also given promoters an option to exit after completing the five-year lock-in period post incorporation as the small finance bank. After the amalgamation, the holdco will cease to exist and ESFB will have a 100% public shareholding.

For the quarter ended September 2022, Equitas SFB reported over two-fold jump in its net profit at ₹116 crore, on good growth in loan disbursals, as compared to ₹41 crore in the year ago period. The net interest income (NII) grew to ₹610 crore as against ₹484 crore in the same period of FY22 whereas the net interest margin (NIM) during the quarter stood at 9%.

The lender said its disbursement during the second quarter of FY23 rose by 22% to ₹3,845 crore from a year ago. Advances as of Q2 FY23 was at ₹22,779 crore, up 20% from the same quarter a year ago. The gross non-performing assets (NPAs) decreased to 3.82% from 3.95% in the first quarter of FY23.