InvestorQ : How is the amalgamation of Equitas Holdings and Equitas Small Finance Bank being structured?
Arti Chavan made post

How is the amalgamation of Equitas Holdings and Equitas Small Finance Bank being structured?

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Rutuja Nigam answered.
4 months ago
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The board of directors of Equitas Holdings and Equitas Small Finance Bank or SFB approved the proposed amalgamation of the two companies. As per the plan, Equitas Holdings, which is the holding company, will be amalgamated into Equitas Small Finance Bank through a process of reverse merger.

Post the news, the stocks of Equitas Holdings and Equitas SFB, both, rallied sharply and this is a continuation of the rally that is one for some time now. Under the approved scheme, Equitas SFB will issue 226 shares for every 100 shares of Equitas Holdings held. After the reverse merger is done, Equitas Holdings will be dissolved without being wound up.

This will have multiple advantages. It will do away with the need to gradually reduce stake in the SFB to below 40% as is the case for all bank holding companies. IN addition, this also saves Equitas Holdings from the holding company discount, that is a challenge for most holding companies. Equitas Holdings currently owns 81.75% stake in Equitas SFB.

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