advertisement
Bandhan Bank is set to become the latest listed lender in India as it looks to raise Rs 4,473 crore via an initial public offering that opens on Thursday, 15 March.
In the three-day offer, the company will issue up to 11.93 crore equity shares at a price band of Rs 370-375 a piece.
At the upper end, it will command a valuation of Rs 44,730 crore, according to BloombergQuint’s calculations. That makes it larger than not only non-banking finance company-turned banking entities such as AU Small Finance Bank, Ujjuvan Financial and Equitas Holdings, but also private banks such as RBL Bank, Federal Bank and IDFC Bank in terms of market capitalisation.
The IPO is a combination of fresh issue worth Rs 3,662 crore and an offer for sale of Rs 811 crore by existing investors – World Bank arms International Finance Corp (IFC) and IFC FIG Investment Company. Post the offer, the promoter holding in Bandhan Bank to come down to 82.3 percent from the current 89.6 percent.
An erstwhile microfinance company, Bandhan Financial Services Ltd, the country largest at the time, Bandhan Bank commenced banking operations in August 2015 after receiving a universal banking licence from the Reserve Bank of India.
Bandhan Bank had 887 branches as of December 2017, with a higher presence in north and northeast India. West Bengal, Assam and Bihar together account for 56.37 percent of the bank’s branches. Micro loans still continue to dominate the loan book with a share of 88 percent.
Other retail loans comprise home loans, two-wheeler loans, loan against property and gold loans. Of its 12 million customers, 10 million are women.
At the upper end of the price band, Bandhan Bank will be available at a multiple of 4.9 times its nine-month FY18 book value post the fresh issue. It’s expensive compared to RBL Bank, IDFC Bank Ujjivan Financial and Equitas Holding. The price-to-book value ratio is closer to HDFC Bank’s.
Antique Broking
ICICI Securities
Centrum Wealth
IIFL Wealth
(This article has been published in arrangement with BloombergQuint)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)