What is the dispute over the swap ratio of Equitas Bank and Equitas Holdings?

The analysts have been consistently questioning the merger of Equitas Holdings and Equitas Small Finance Bank on the grounds that the swap ratio was fairly inequitable to the shareholders of the SFB while being generous to Equitas Holdings. The view that is now emerging among the analysts is that the transaction was tilted in favour of the much smaller holding company, despite a relatively smaller base of assets and net worth.

The swap ratio intends to allot 231 shares of Equitas SFB for every 100 shares of Equitas Holdings to the shareholders of Equitas Holdings. Post-merger, Equitas Holdings will be dissolved and there will be no promoter group for Equitas Small Finance Bank, with only professional shareholdes. The market cap of Equitas SFB stands at Rs.6,404 crore compared to Rs,3,644 crore for Equitas Holdings. The allotment swap ratio does look skewed.