Mumbai: Kolkata-based Bandhan Bank Ltd on Thursday said it will launch its Rs4,470 crore initial public offering (IPO) on 15 March.
Bandhan Bank has set a price band of Rs370-375 per share for its IPO. At the upper end of the price band, the share sale values the lender at Rs44,730 crore. The issue closes on 19 March. 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.
Bandhan’s IPO valuation puts it ahead of IDFC Bank Ltd, which was the other entity to receive a universal banking licence from the Reserve Bank of India (RBI) in 2015. On 8 March, IDFC Bank’s market capitalization stood at Rs16,831.37 crore. Yes Bank Ltd with a Rs70,874.8 crore market capitalization is placed one rank ahead of Bandhan.
The share sale will see a dilution of around 10% stake.
The IPO also comprises a fresh issue of 97.66 million shares, which at the upper end of the price band will fetch the company Rs3,660 crore. The proceeds from the fresh issue will be used to augment the bank’s tier-I capital base to meet future capital requirements of the bank.
International Finance Corp. (IFC) and IFC FIG Investment Co. are offering 14.05 million and 7.57 million shares, respectively. IFC and its arm will collectively garner Rs810 crore from the initial share sale. IFC and IFC FIG collectively own 4.94% stake in the bank. Post-IPO, promoter Bandhan Financial Holding’s stake will reduce to 82.28% from 89.62% at present.
Bandhan started its banking operations in August 2015. As of 31 December, Bandhan Bank had 887 bank branches and 430 ATMs.
“Today, we have around 12 million customers, with 9.86 million micro loan customers and 2.13 million general banking customers. We are opening 15,000 new accounts everyday," said Chandra Shekhar Ghosh, managing director and CEO of Bandhan Bank.
Bandhan’s deposits and gross advances stood at Rs25,293.9 crore and Rs24,364.3 crore, respectively, as of 31 December.
“Only 6% of our deposits come from our micro loan customers, while the rest are from our banking customers, which are the new customers that we have acquired since 2015. There is no bank with such a differentiated model across the world, with micro-credit occupying 88% of our total advances," added Ghosh.
Bandhan Bank’s current offerings include retail loans, micro loans, micro, small and medium enterprise (SME) loans and small enterprise loans.
According to Sunil Samdani, chief financial officer of Bandhan Bank, the lender will continue to focus on micro-lending, while looking to grow its retail and SME lending portfolios, and boosting the share of non-interest income by increasing third-party offerings.
In 2016-17, Bandhan Bank reported a total revenue of Rs4,320.12 crore, up 150% from the previous year, according to its red herring prospectus. The lender’s profit rose by 304% to Rs1,111.95 crore in 2016-17 from a year earlier.