Kotak Mahindra Capital, Axis Capital, Goldman Sachs (India) Securities, JM Financial Institutional Securities and J.P. Morgan India are the lead book running managers of Bandhan Bank’s IPO. Photo: Indranil Bhoumik/Mint
Kotak Mahindra Capital, Axis Capital, Goldman Sachs (India) Securities, JM Financial Institutional Securities and J.P. Morgan India are the lead book running managers of Bandhan Bank’s IPO. Photo: Indranil Bhoumik/Mint

Bandhan Bank files DRHP, eyes IPO launch in March or April

Bandhan Bank IPO consists of a fresh issue of up to 97.6 million shares and an offer for sale of up to 14.05 million shares by IFC and up to 7.56 million equity shares by IFC FIG Investment

Mumbai: Bandhan Bank Ltd, one of the two entities to receive a universal banking licence in 2015 and the only microfinance institution to do so, on Monday filed its draft initial public offering (IPO) prospectus.

In a statement, the bank said that it will be offering 119.28 million shares in its proposed initial share sale, through a mix of primary and secondary share sale.

“In terms of the RBI New Bank Licensing Guidelines, the Equity Shares of our Bank are required to get listed on the stock exchanges within three years from the date of commencement of business of our Bank, i.e., on or before August 22, 2018," the bank said in its draft red-herring prospectus (DRHP) filed with the Securities and Exchange Board of India (Sebi).

The IPO consists of a fresh issue of up to 97.6 million shares and an offer for sale of up to 14.05 million shares by International Finance Corp. (IFC) and up to 7.56 million equity shares by IFC FIG Investment Co.

IFC and IFC FIG collectively own 4.94% stake in the bank.

The share sale will see a dilution of around 10% stake.

“The objects of the fresh issue are to augment our bank’s Tier-I capital base to meet our bank’s future capital requirements. Further, the proceeds from the issue will also be used towards meeting the expenses in relation to the issue," Bandhan Bank said in its DRHP.

Investment banks Kotak Mahindra Capital Co. Ltd, Axis Capital Ltd, Goldman Sachs (India) Securities Pvt. Ltd, JM Financial Institutional Securities Ltd and JP Morgan India Pvt. Ltd are managing the IPO.

Bandhan’s IPO is expected to be one of the largest IPOs this year and is expected to hit the market around March or April.

“The marketing of the IPO will start soon. The deal is on the fast track and the management is looking at a timeline of around March/April for the launch, depending on market volatility," said a person aware of the bank’s IPO plans, requesting anonymity as he is not authorized to speak with the media.

As of 30 September, Bandhan Bank had 864 bank branches and 386 ATMs, together serving over 1.87 million customers. The bank’s current account and savings account deposits stood at Rs7,170 crore as of 30 September, a CASA ratio of 28.18%.

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