Saturday, 18 August, 2018

India's Bandhan Bank to launch up to $689 mln IPO next week

Bandhan Bank IPO Date Lot Size Listing And Other Details Bandhan Bank will sell 119.28 million equity shares in IPO
Kristopher Love | 11 March, 2018, 16:00

Its optimism on the IPO, which begins on March 15 and closes on March 19, is based on strong fundamentals for financial services companies in a country where millions of people still do not have a bank account. The issue of Bandhan Bank, which transformed from a micro-finance entity, is said to be the biggest banking IPO by a local bank. The price/earnings ratio based on the basic earnings per share for the financial year 2017 at the upper end of the price band is 36.95 as against the industry average peer group P/E of 35.36. Bandhan Bank's valuation will surpass that of Federal Bank Ltd, which was valued at Rs18,345.7 crore as of closing on 8 March, making it the seventh most valuable private sector lender on the Indian bourses.

The bank's management will also have to sit with the Reserve Bank of India to discuss its promoter shareholding, which is required to be brought down to 40 percent after the listing.

The share sale will see a dilution of around 10% stake. The bank will sell up to 97.7 million new shares, while its shareholders International Finance Corp, part of the World Bank, and IFC FIG will sell up to 21.6 million shares.

Registrar to Bandhan Bank offer: Karvy Computershare Private Limited is the registrar to the issue. Post-IPO, promoter Bandhan Financial Holding's stake will reduce to 82.28% from 89.62% at present. As on December 31, 2017, Bandhan Bank's deposits stood at Rs 25,293 crore, and advances at Rs 24,463 crore.

"Today, we have around 12 million customers, with 9.86 million micro loan customers and 2.13 million general banking customers".

"We will have to act according to the regulator's guidance", Bandhan Bank managing director and CEO Chandra Shekhar Ghosh said on Friday. As per RBI's licensing norms, the equity shares of the Bandhan Bank are to be listed on or before August 22, 2018. The lender's profit rose by 304% to Rs1,111.95 crore in 2016-17 from a year earlier.