BFHL offloaded its stake to at least 7 investors, including GIC, Temasek, Morgan Stanley Asia Singapore
GIC is an existing shareholder of Bandhan Bank and held 4.9% stake in the bank through Caladium, before Monday’s fresh purchase
Bandhan Bank Ltd on Monday said it has met the promoter holding norms of the Reserve Bank of India (RBI) after its holding company Bandhan Financial Holdings Ltd (BFHL) sold 20.95% stake in the bank to at least seven investors.
The buyers included Singapore’s state investors GIC and Temasek, which purchased the shares through affiliates Caladium Investment Pte Ltd and Camas Investment Pte Ltd respectively, and others such as Morgan Stanley Asia Singapore Pte, Bandhan Employees Welfare Trust, Copthall Mauritius Investment Ltd, Societe Generale and Credit Suisse Singapore Ltd.
GIC is an existing shareholder of Bandhan Bank, owning a 4.9% stake through Caladium, before Monday’s transaction.
While Caladium took 40.07 million shares, Camas Investments purchased 24.58 million shares, and Morgan Stanley Asia bought 8.17 million shares, showed data from BSE.
“To be fully-compliant with the licensing guidelines, the Non-Operative Financial Holding Company (NOFHC) has on 3 August 2020 informed the bank that it has diluted its excess shareholding of 20.95% or 33,73,67,189 equity shares, of ₹10 each fully paid-up in the bank through secondary market sale," the bank said in a regulatory filing. Mint reported on 2 August that Bandhan Financial Holdings will sell shares worth ₹10,500 crore or $1.4 billion, through block trades on the stock exchanges, citing deal terms.
A floor price of ₹311.1 per share has been set for the share sale, which is a discount of 9.89% to Friday’s closing price of ₹345.25 apiece, Mint reported. Investment banks Credit Suisse, JPMorgan, Goldman Sachs, and JM Financial advised Bandhan Financial on the share sale.
Under the Reserve Bank of India norms, Bandhan’s holding company was required to bring its shareholding to 40% of the paid-up voting equity capital of the bank.
“The bank has been exploring various options to bring the shareholding to the prescribed level. Pursuant to amalgamation of Gruh Finance Ltd into and with the bank effective from 17 October 2019 and consequent to issuance of fresh equity shares to the shareholders of Gruh on 21 October 2019, the shareholding of NOFHC in the bank diluted from 82.26% to 60.96% of its paid-up voting equity share capital," the bank said on Monday.
In January 2019, Bandhan Bank had acquired HDFC Ltd-owned Gruh Finance Ltd through an all-share deal, as part of its efforts to bring down promoter shareholding. Prior to the deal, Bandhan Financial held an 82.28% stake. The acquisition helped Bandhan Bank expand its housing finance portfolio.
After it failed to comply with RBI’s norms on shareholding in September 2018, the central bank imposed restrictions on expansion of branch network and chief executive officer remuneration. However, citing the efforts made by the bank in reducing its promoter shareholding, RBI lifted the restrictions in February 2020, with certain conditions.
Shares of Bandhan Bank fell 10.6% on Monday to close to ₹308.65.