Ujjivan to seek RBI's guidance on listing

Kolkata: Ujjivan Small Finance Bank promoters said they have shortlisted a couple of options like issuing bonus shares for the bank's listing exercise and would seek Reserve Bank of India's guidance before finalising it, instead of finalising it unilaterally and then seeking the regulator's permission.

This would prevent Ujjivan promoters from the embarrassment of rejection from the regulator. In the case of Kotak Mahindra Bank, RBI denied the bank the permission to issue preferential shares to reduce promoter's stake.


"We have finally boiled down to a couple of options for listing including issuing bonus shares to follow the mandate to list the bank separately," Samit Ghosh told ET.

"We will discuss the plan with RBI and Sebi and finalise it based on their comfort level," he said.

RBI directed promoters of Ujjivan and Equitas to list their banking units separately within three years of operations. Ujjivan Financial Services, which is the holding company and the promoter of the bank, is a listed entity while Ujjivan Small Finance Bank is not.

The bank commenced operation in February 2017 and therefore it will have to be listed latest by January 2020.

One of the option before the company is to issue bonus shares of the bank to investors of Ujjivan Financial. This will allow the promoter dilute up to 60% of its holdings in the bank in favour of its existing shareholders and to remain a non-operating core investment company. The bonus shares will then be listed on the stock exchanges.

Ghosh said issuing bonus shares fully could be expensive and therefore it would like to explore a combination of instruments.

After the listing exercise, the promoter will have to dilute their holding to 40% by January 2022.

Ujjivan on Wednesday reported Rs 45 crore consolidated net profit for the December quarter as against Rs 29 crore in the year ago period. Its loan book grew 32% year-on-year to Rs 9349 crore with micro loan portfolio shrinking to 86% from 94.5% a year back.