At IPO price, the microfinance-focused bank is valued at nearly Rs 450 billion.
IPO News : Bandhan Bank is set to become the latest listed lender in India as it looks to raise Rs 4,473 crore via an initial public offering that opens on Thursday.
In the three-day offer, the company will issue up to 11.93 crore equity shares at a price band of Rs 370-375 apiece. At the upper end, it will command a valuation of Rs 44,730 crore, according to BloombergQuint’s calculations.
That makes it larger than not only non-banking finance company-turned banking entities such as AU Small Finance Bank, Ujjuvan Financial and Equitas Holdings, but also private banks such as RBL Bank, Federal Bank and IDFC Bank in terms of market capitalisation.
The IPO is a combination of fresh issue worth Rs 3,662 crore and an offer for sale of Rs 811 crore by existing investors – World Bank arms International Finance Corp (IFC) and IFC FIG Investment Company. Post the offer, the promoter holding in Bandhan Bank will come down to 82.3 percent from the current 89.6 percent.
An erstwhile microfinance company, Bandhan Financial Services Ltd., the country largest at the time, Bandhan Bank commenced banking operations in August 2015 after receiving a universal banking licence from the Reserve Bank of India.
Investment bankers are, however, confident that the issue will garner good response.
“Markets will always show some volatility. The bank’s fundamentals are very strong. It has a differentiated business model. Despite the market corrections, the issue will do well,” said Vishal Kampani, MD, JM Financial Group.
Bandhan Bank and IDFC Bank are among the latest entities to be awarded bank licenses by the RBI. The two received the central bank’s “in-principle” in April 2014 and a final nod a year later.