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Bandhan Bank has filed draft papers to launch its maiden public offer. In the draft prospectus filed with capital market regulator SEBI, the Kolkata-based company said the IPO will include sale of 119,280,494 equity shares of face value of INR10 each. While the pricing of Bandhan Bank IPO is not yet finalized, the offer is expected to raise around INR2,500 crore (INR25 billion), according to market sources.
The IPO consists of a fresh issue of up to 97,663,910 shares and the proceeds will be used to augment the bank’s tier-I capital base to meet its future capital requirements. This includes organic and inorganic growth and expansion and to comply with regulatory requirements for enhanced capital base as may be prescribed in the future.
The IPO will also involve an Offer For Sale (OFS) of up to 14,050,780 shares by International Finance Corporation (IFC) and up to 7,565,804 shares by IFC FIG Investment Company. The two firms together own just under 5% equity in the bank and will be paring it down to nearly half through the IPO. Singapore’s sovereign wealth fund GIC Pte Ltd also holds 4.99% equity in the bank through its affiliate Caladium Investment. However, GIC is not selling any of its shares in Bandhan Bank IPO.
Kotak Mahindra Capital Company, Axis Capital, Goldman Sachs India Securities, JM Financial Institutional Securities and J P Morgan India have been appointed the book running lead managers to Bandhan Bank IPO. Started by Chandra Shekhar Ghosh who is also the managing director, the bank posted net profit of INR1,111.9 crore on a top line of INR4,320.1 crore in the latest financial year ended 31 March 2017.
Bandhan Bank is the first micro-finance entity in India transforming into a universal bank. Given the positive response to earlier micro-finance lenders turning into small finance banks such as Ujjivan and Equitas, Bandhan Bank IPO is also likely to receive a good response.