Equitas Holdings Ltd. (EHL) shares gained after its board approved a reverse merger with Equitas Small Finance Bank (ESFB).
Shares on Tuesday jumped up to 10 per cent as the board of directors and shareholders of the two companies approved their amalgamation scheme.
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Equitas Holdings rallied 4.9 per cent to Rs 130.50 on BSE.
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The stock of Equitas Small Finance Bank also gained 2.38 per cent to Rs 64.60.
According to their exchange filings, shareholders will receive 226 shares of Rs 10 each of Equitas Small Finance Bank for every 100 shares of Rs 10 each of Equitas Holdings. The merger is subject to regulatory approvals and that from the National Company Law Tribunal.
The board of Equitas Small Finance Bank, too, has approved the reverse merger.
EHL (transferer company) is the promoter or the holding company of ESFB (transferee company).
Earlier this month, Equitas SFB had received Reserve Bank of India’s (RBI) nod to apply for amalgamation of the promoter into itself.
The amalgamation intends to comply with the RBI norms on small finance banks, mandating the promoter to reduce the stake in the subsidiary to 40 per cent within five years of commencement of operations by the SFB.
As of June 30, 2021, EHL held 81.75 per cent stake in ESFB.
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