Bandhan Bank has set a final price band of Rs 370 to Rs 375 per share for its initial public offer (IPO). The Kolkata-based lender plans to sell up to 11.9 crore shares, and when calculated at the upper price of the band, the offer could garner Rs 4,473 crore. Bandhan Bank’s IPO will be the biggest issue by a local bank. The IPO comprises a fresh issue of 9.76 crore shares and an offer for sale of 2.16 crore shares. Financial institution IFC is the existing investor tendering its shares through the offer for sale. The issue will constitute at least 10% of the post-issue paid-up equity share capital of the bank. The issue will open on March 15 and close on March 19. Bids can be made for a minimum lot of 40 shares and in multiples of 40 shares after that. The shares of the bank are required to get listed on the stock exchanges within three years from the date of commencement of business. For Bandhan Bank, the deadline is August 22, 2018. Bandhan Bank said it will use the proceeds of the fresh issue to augment its tier-I capital base and to meet the bank’s future capital requirements. The bank will not receive any proceeds of the offer for sale. At present, Bandhan Bank offers a variety of asset and liability products and services designed for micro banking and general banking.
Bandhan Bank’s asset products consist of retail loans including a substantial portfolio of micro loans, as well as micro, small and medium enterprise loans and small enterprise loans. As of December 31, 2017, 96.49% of Bandhan Bank’s gross advances were in priority sector lending category. The bank’s liability products consist of savings accounts, current accounts and a variety of FDs. Kotak Mahindra Capital, Axis Capital, Goldman Sachs, JM Financial and JPMorgan India are merchant bankers to the issue. Bandhan Bank’s current account and savings account deposits together stood at `8,401 crore as on December 31, 2017. The bank has a CASA ratio of 33.22%. As on December 31, 2017, the bank’s total deposits and gross advances (including IBPC/Assignment) stood at Rs 25,293 crore and Rs 24,364 crore, respectively. For the nine months ended December 31, 2017 and 2016, Bandhan Bank had net interest margins (NIMs) of 9.86% and 10.34%, return on equity (RoE) of 25.55% and 27.88% and return on assets (ROA) of 4.07% and 4.39%, respectively. For FY17 and FY16, Bandhan Bank had a total income of Rs 4,320 crore and Rs 1,731 crore and profit after tax of Rs 1,111 crore and Rs 275.24 crore, respectively. In 2017, 36 companies raised Rs 67,147 crore through IPOs. Listing gains and returns by newly listed companies as also the positive sentiment in the broader market are among the reasons attributed to the trend.