MUMBAI Indian financial services firm Equitas Holdings Ltd attracted demand for more than 17 times the number of shares on sale in its initial public offering (IPO) of up to $327 million, amid strong interest from institutions for the biggest local IPO so far in 2016.
Shareholders in Equitas - one of the 10 companies selected by India's central bank to set up niche finance banks for small businesses and farmers - were selling part of their holdings to raise as much as 14.56 billion rupees ($219 million).
Separately, Equitas was selling new shares to raise up to 7.2 billion rupees.
Cornerstone investors bid for 6.53 billion rupees worth shares as part of the IPO.
Investors said Equitas' valuation and growth potential attracted them.
"The way the company has been growing, it has a potential to be much bigger in the next few years," said Mahesh Patil, co-chief investment officer at Birla Sun Life Asset Management Co, which bought shares in the IPO.
Equitas, which already offers small loans to individuals and companies and also runs a housing finance business, will merge the units to create the small finance bank.
Ujjivan Financial Services, another permit winner to set up a small finance bank, has also filed for an IPO.
($1 = 66.6192 Indian rupees)
(Reporting by Devidutta Tripathy and Himank Sharma; Editing by Mark Potter)
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