Equitas Holding soars as RBI gives a green signal for merger

Equitas Holding soars as RBI gives a green signal for merger

by 5paisa Research Team Last Updated: Dec 15, 2022 - 10:16 am 29.3k Views
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The shares of Equitas Holdings (EHL ) are witnessing a strong rally in today’s session outperforming the benchmark which is trading in weakness. In intraday trading, shares of EHL touched a high of 114.95, up by 7.7% from the previous close.

Board of Equitas Holdings (transferor) and Equitas Small Finance Bank (transferee) had approved the scheme of amalgamation of the two companies on March 21. The amalgamation, however, was subject to approvals from RBI, stock exchanges, SEBI as well as the National Company Law Tribunal (NCLT). Under the proposed scheme, EHL will be merged into ESFBL and EHL will be dissolved without winding up.

On May 6, RBI conveyed its “no-objection” to the scheme of amalgamation of Equitas Holding(EHL) with Equitas Small Finance Bank (ESFBL) subject to certain conditions.

RBI has directed EHL to divest its shareholding in its subsidiary, Equitas Technologies Pvt Ltd prior to scheme taking effect. While ESFBL will have to seek RBI approval for bringing Equitas Development Initiatives Trust (EDIT) and Equitas Healthcare Foundation (EHF) under its ambit prior to scheme taking effect.

RBI has further stipulated that any investor who acquires/ holds 5% or more of the shareholding of ESFBL shall seek approval of RBI and until that investor is found "fit and proper", their voting rights in ESFBL will be restricted to below 5% of total voting rights of shareholders of ESFBL.

Further the scheme of voluntary amalgamation is subject to the approval of (requisite majority of shareholders and creditors of )transferor company (EHL) and transferee company (ESFBL); SEBI and NCLT. Until such approvals, both companies will have to ensure compliance with applicable SEBI norms.

Latest market capitalization of EHL and ESFBL stands at Rs 3667 crore and Rs 6812 crore, respectively. At the closing bells, EHL was at Rs 108.55, up 1.73% or Rs 1.85 per share.

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