Bandhan sets IPO date, price

Mumbai: Bandhan Bank on Thursday announced a price band of Rs 370-375 per share for its initial public offering (IPO). The Calcutta-based bank is looking to raise Rs 4,473 crore at the upper end of the price band, which could be the biggest share float by a domestic lender.

The offering will open on March 15 and close on March 19.

The private lender will sell over 11.92 crore shares. This will consist of a fresh issue of a little over 9.76 crore shares and an offer for sale for up to 1.40 crore shares by World Bank-controlled International Finance Corporation (IFC) and 75.65 lakh shares shares by the IFC FIG. Bids can be made for a minimum lot of 40 shares and in multiples of 40 shares thereafter.

From the fresh issue of over 9.76 crore shares, the bank will raise over Rs 3,660 crore.

One of the objectives of the fresh issue is to augment the bank's core capital to meet its future requirements and expand its presence in the country.

Further, in line with the RBI's licensing conditions, it has to be listed within three years from the commencement of business as a bank.

Bandhan Bank, which had transferred its entire microfinance business to Bandhan Financial Services in 2009, had received the central bank's approval to start banking operations in April 2014 and started its operations in August 2015.

While the promoters of the bank (Bandhan Financial Holdings Limited) currently own a little over 89 per cent, it is learnt that this will come down to around 82 per cent after the issue.

"The entire proceeds of the offer, which will close on March 19, will be utilised for capital requirements," Chandra Shekhar Ghosh, the banks' founder, managing director and chief executive officer, said.

He pointed out that there was a huge potential for micro credit in the country as lenders have so far tapped only a small portion of the segment.

For Bandhan Bank, its IPO comes at a time investor sentiment remains subdued, particularly for the banking sector, in the wake of the Rs 12,700-crore scam at Punjab National Bank (PNB).

However, investment bankers expressed optimism that the IPO will see a strong response, given Bandhan Bank's robust performance so far and the potential ahead.

As on December 31, 2017, Bandhan Bank's deposits stood at Rs 25,293 crore and advances at Rs 24,463 crore. Its strength lies in small-ticket lending where it has more than 2,600 doorstep service centres and almost 10 million micro loan customers.

Bandhan Bank has also been growing its general banking business. As on December 31, 2017, it had 900 branches in the country.

It has general banking customers of about 2.13 million and 98 per cent of the bank's net advances were in the priority sector as of financial year 2016-17.

"Around 88 per cent of the bank's credit is micro credit and 12 per cent is non-micro credit. In the future we would like to keep both of them intact," Ghosh added.


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