At the top end of the price band, Bandhan Bank will be valued at almost Rs 450 billion, making it the eight most valuable bank in the country. The offering also comprises of Rs 8 billion worth secondary share sale by the International Finance Corporation (IFC), an investment arm of the World Bank.
However, Securities and Exchange Board of India (Sebi) mandates a one year lock-in period for promoters after an IPO, which means the promoters can not sell shares within an year of listing.
This is because two mandates of Reserve Bank of India, one of which says mandatory listing within three years of starting operations and the other reduction of promoter's stake to 40%, again within three years of commencing operations.
The issue opens on March 15 and closes on March 18.
The private lender will sell over 11.92 crore shares. 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. IFC and IFC FIG collectively own 4.94% stake in the bank. The Kolkata-based bank was started as a microfinance firm in 2001 and converted to a bank in 2015 as India approved new licenses in an effort to tap rural savings and improve access to credit. Post-IPO, promoter Bandhan Financial Holding's stake will reduce to 82.28% from 89.62% at present.
Bandhan has a network of 893 branches with 27,300 employees.
"Today, we have around 12 million customers, with 9.86 million micro loan customers and 2.13 million general banking customers".
Bandhan Bank's current offerings include retail loans, micro loans, micro, small and medium enterprise (SME) loans and small enterprise loans.
State Bank of India is the only public sector lender to have a higher valuation than Bandhan Bank. As per the preliminary prospectus, the bank, led by CEO Shekhar Ghosh, had a net interest margin of 10 per cent for the six months on ending September 30, 2017.Bandhan and IDFC Bank got banking permits from the RBI in 2014. The lender's profit rose by 304% to Rs1,111.95 crore in 2016-17 from a year earlier.
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