1. Bandhan Bank hires Goldman Sachs, 4 others as merchant bankers for IPO

Bandhan Bank hires Goldman Sachs, 4 others as merchant bankers for IPO

Bandhan Bank has appointed five merchant bankers on Tuesday for its proposed IPO.

By: | Published: September 12, 2017 5:34 PM
The book running leading managers include Goldman Sachs, JP Morgan, Axis Capital and JM Financial among one other for its public offer. (Express Photo)

Bandhan Bank has appointed five merchant bankers on Tuesday for its proposed IPO. The book running leading managers include Goldman Sachs, JP Morgan, Axis Capital and JM Financial among one other for its public offer. The private sector lender has completed two years as a universal bank. As per the Reserve Bank of India’s guidelines, it has to go for an IPO in next year. Earlier in August 2017, Chandra Shekhar Ghosh, managing director and chief executive officer, Bandhan Bank said I will not defer the launch of IPO, but the timing of its launch will depend on the market conditions.

Bandhan Bank, which was the first instance in the country of a microfinance entity transforming into a universal bank, commenced its operations on August 23, 2015 with 501 branches across 24 states. Both GIC, Singapore’s sovereign wealth fund, and International Finance Corporation (IFC), a member of the World Bank Group, hold nearly 5% stake in the bank. Representatives from IFC and GIC have joined the bank’s board.

IPO planning

“There is no hard and fast rule really that our initial public offer will have to hit the capital market by August next year,” he pointed out, adding it would be difficult to say that exactly when the IPO would be floated. Also, the bank had not yet decided on the total issue size. Last year, Ghosh had said he would prefer more lenient terms for the timing of the listing on stock exchanges for his bank as according to the on-tap universal banking licences guidelines, new banks would have to be listed within six years of the commencing business.

Bank’s profile

Currently, Bandhan Bank has 840 branches and 383 ATMs, with 11 million customers. Around 70% of its branches are in rural areas. It has mobilized deposits worth Rs. 23,500 crore, while loan book stands at Rs. 20, 800 crore. The lender has two divisions — general banking and micro banking, offering a suite of retail financial solutions, including a variety of savings and loan products. Micro-lending constitutes around 90% of the bank’s total loan portfolio. Bandhan, however, is eyeing a change in the business mix after a few years. “We expect in the next 3-5 years non-micro loans will be around 25% of our total loan book,” Ghosh added.

Financials

Bandhan Bank reported a rise of 35% in the net profit to Rs 327 crore for the first quarter ended 30 June 2017 from Rs 242 crore for the corresponding period a year ago. During the quarter, its operating profit grew 44.68% to Rs 557 crore as against Rs 385 crore in the year-ago period.

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