Equitas Small Finance Bank stock hits fresh high on two-fold rise in Q2 profit

Share of Equitas Small Finance Bank rose to a fresh high today after the lender reported over two-fold jump in Q2 net profit. Equitas Small Finance Bank stock rose 5.20% to Rs 34.35 against previous close of Rs 32.65 on BSE. At 1:58 pm, the share was trading 3.22% higher at Rs 33.70.

On BSE, market cap of the bank stood at Rs 3,830 crore. Total 7.10 lakh shares changed hands amounting to turnover of  Rs 2.89 crore.

Equitas Small Finance Bank clocked over two-fold jump in net profit at Rs 103 crore in Q2 on healthy core income and fall in bad assets.

In Q2 of last fiscal, the bank posted a net profit of Rs 49 crore.

The small finance bank (SFB), which got listed on capital markets on November 2, reported a 32 per cent growth in net interest income at Rs 461 crore in Q2 of FY 21 as against Rs 351 crore in Q2FY20.

Total income rose 22.4 per cent to Rs 861.23 crore during the reported quarter as against Rs 703.39 crore in the year-ago period.

Provisions for bad loans and contingencies nearly doubled to Rs 84 crore from Rs 45.4 crore a year ago.

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The bank's gross non-performing assets (NPAs) fell to 2.48 per cent of the gross advances at the end of September 2020 from 2.88 per cent a year ago.

On November 2, the lender made a tepid debut as the scrip got listed at Rs 31, a 6.06 per cent discount to its issue price of Rs 33.

The IPO, was subscribed 1.95 times in the three-day bidding process, much less compared with the issues that hit the market prior to it. The HNI quota of shares in the IPO remained undersubscribed at 22 per cent.

The IPO of Equitas Small Finance Bank was subscribed 1.94 times on October 22, the final day of bidding. The IPO which aims to collect Rs 518 crore received bids for 22.57 crore equity shares against offer size of 11.58 crore equity shares, subscription data on exchanges showed.  The lender had raised Rs 140 crore from anchor investors on October 19.

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The portion allocated for qualified institutional investors was subscribed 3.9 times, and that of non-institutional investors 22 percent and retail investors 2.08 times.

The IPO of Equitas Small Finance Bank (ESFB) opened on October 20. The share sale of the Chennai-based lender comprised fresh issue of Rs 280 crore (8.5 crore equity shares) and an offer for sale of 7.2 crore equity shares, taking the total issue size to Rs 517.6 crore. Bids could be made for a minimum of 450 equity shares and in multiples of 450 equity shares thereafter, extending up to 13 lots.

Price band for the IPO was fixed at Rs 32-Rs 33 per equity share.