Ujjivan hits foreign investment limit

The recently listed microfinance lending company, Ujjivan Financial Services witnessed a slump in its stock prices after the Reserve Bank of India reported that the aggregate foreign shareholdings in the company had crossed the permissible limit. Hence, the FIIs will not be able to invest further.

The shareholding pattern was not discovered. The company is100 per cent public so far with 0 promoters’ stake. The cumulative foreign shareholding through foreign institutional investors (FIIs) registered foreign portfolio investors (RFPIs), foreign direct investment (FDIs), non-resident Indians(NRIs), American depository receipts (ADRs), global depository receipts (GDRs) and persons of Indian origin in Ujjivan Financial Services has crossed the permissible limit according to RBI.

Meanwhile, RBI has recently granted small bank's licence to Ujjivan Financial Services. It would be the holding company for the proposed Ujjivan Small Bank. This small finance bank will carry basic banking activities like accepting deposits and lending to the unserved and under-served, including small businesses, small and marginal farmers, micro and small industries and unorganised sector entities.

RBI further states that the stake of promoters in the small bank should be 40 per cent of the total paid-up capital that will be gradually brought down to 26 per cent within 12 years from the date of commencement of business of the bank.