The Kolkata-based private sector lender Bandhan Bank has finalised the price band for the much-awaited IPO and will begin the initial share sale from next week. Bandhan Bank will launch India’s biggest IPO (initial public offering) ever by a local bank raising up to Rs 4,473 crore on 15 March 2018. Earlier last month, Bandhan Bank got the SEBI approval for the IPO after two months of filing the DRHP. In the biggest banking IPO, Bandhan Bank and its shareholders will be selling up to 11.93 crore shares of face value Rs 10 which is 10% of the post-issue share capital of the bank. Bandhan Bank got a bank license from the Reserve Bank of India in 2014, being the first microfinance entity to receive a bank license.
Here are 10 facts about India’s biggest banking public issue:
- For the biggest banking IPO by a local bank, Bandhan Bank has set a price band of Rs 370 to Rs 375 of face value Rs 10 per equity share.
- Out of the total issue size of 11.93 crore shares, Bandhan Bank is issuing fresh equity shares to the tune of 9.7 crore shares and an offer for sale of around 2.16 crore shares.
- At the upper end of the price band, Bandhan Bank has expected to raise up to Rs 4,473.75 crore from the IPO while the selling shareholders, International Finance Corp, part of the World Bank Group, and IFC FIG, have expected to garner up to Rs 810 crore (inclusive of total amount).
- From the fresh issue of 9.77 crore equity shares, Bandhan Bank will raise up to Rs 3,663.75 crore.
- The floor price is 37 times and the cap price is 37.5 times the face value of the equity share. Bids can be made for a minimum of 40 equity shares and in multiples of 40 equity shares thereafter.
- The Price/Earnings ratio based on the basic EPS for the financial year 2017 at the upper end of the price band is 36.95 as against the industry average peer group P/E of 35.36.
- The promoters of Bandhan Bank are Bandhan Financial Holdings Ltd, Bandhan Financial Services Ltd, Financial Inclusion Trust and North East Financial Inclusion Trust.
- The average cost of acquisition of equity shares for IFC and IFC FIG, the selling shareholders in the public offer is Rs 42.93 and Rs 41.77 respectively.
- The biggest banking IPO of Bandhan Bank will remain open for three days for subscription from 15 March 2018 to 19 March 2018.
- The shares of Bandhan Bank are proposed to be listed on both NSE and BSE.
The Kolkata-based financial services entity turned private sector lender Bandhan Bank had paved the way for share sale way back in 2017 following which the bank filed DRHP (draft red herring prospectus) with SEBI (Securities and Exchange Board of India) on 1 January 2018. Bandhan Bank had appointed five merchant bankers for its IPO, namely, Goldman Sachs (India) Securities Pvt Ltd, Kotak Mahindra Capital Company Ltd, Axis Capital Ltd, JM Financial Institutional Securities and JP Morgan India Private Ltd while Karvy Computershare Private Ltd is the registrar to the issue. Bandhan Bank commenced its operations as a banking entity on 23 August 2015 with 501 branches across 24 states after it transformed from microfinance entity to a universal bank.