InvestorQ : Why did the shares of Equitas and Ujjivan rally to upper circuit on 12 July?
Anamika Sodhani made post

Why did the shares of Equitas and Ujjivan rally to upper circuit on 12 July?

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Angel dcosta answered.
3 weeks ago
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You are absolutely right because on 12 July, both Equitas Holdings and Ujjivan Financial Services rallied up to 20% and hit upper circuit. This was triggered after RBI allowed small finance banks or SFBs and its holding companies to apply for the Amalgamation scheme. Both Equitas and Ujjivan have a small finance bank subsidiary of the same name. This will do away with the need to reduce the stake of the holdings companies to below 40%.

Currently, both Ujjivan and Equitas hold over 82% in their SFB subsidiaries and they would have to have cut the stake to below 40%, since they have completed 5 years of operations. With the amalgamation, that dilution will not be required. In addition, holding companies will not be subject to the regular holding company discount any longer. Apart from the holdings companies, the SFB subsidiaries of Ujjivan and Equitas were also up sharply.

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