The boards of Equitas Small Finance Bank and Equitas Holdings have approved Equitas SFB's merger with the promoter company (Equitas Holdings). In an interview with CNBC-TV18, PN Vasudevan, MD & CEO, Equitas Small Finance Bank, said that he hopes to complete the said merger in a year’s time.

He said, “The merger scheme was amended by the board two days back and now the swap ratio comes to 100:231 instead of 100:226 earlier. This marginal change is because of some change in the market price of the two companies over the last few months.”

“We will now be applying to both SEBI and RBI for the respective approvals from the regulators and then we will go to NCLT and the shareholders for the approval. So, we hope to complete the entire process in about a year’s time,” said Vasudevan.

Vasudevan said that collections have been improving for the industry. He explained that normalisation has helped small borrowers repay the loans. Additionally, he mentioned that the return on equity (RoE) target for the bank is 15 percent and the return on assets (RoA) target is 2 percent.

Also Read: Equitas SFB board approves merger with holding company; details here

On increased public shareholding by the bank via the QIP route, he said, “There is not too much equity dilution. The QIP that we raised is the only dilution; the merger doesn’t change the capital structure of the bank in any way because it’s just a merger and the holding company shares will get cancelled and remaining shareholders of the holding company will get shares of the bank.”

For the entire interview, watch the accompanying video

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First Published:Mar 23, 2022 11:12 AM IST