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Photo Credit: Shah Junaid/VCCircle

IFC-backed Bandhan Bank’s IPO subscribed 88% on day 2

16 March, 2018

Bandhan Bank Ltd’s initial public offering was covered 88% on the second day, on Friday, as institutional investors continued their participation.

The public issue comprising 83.49 million shares, excluding the anchor allotment, received bids for 73.61 million shares, stock exchange data showed.

Institutional buyers bid for 55.55 million shares, or 2.32 times the portion reserved for them. Non-institutional investors, comprising wealthy individuals and corporate bodies, bid for 24% of shares from their quota.

Retail investors, who cannot individually bid for shares exceeding Rs 2 lakh in value, was covered 33%.

The IPO was covered 42% on the first day on Thursday. The public issue will close on 19 March.

The Kolkata-based lender had raised Rs 1,342 crore ($207 million) from a clutch of anchor investors, including Abu Dhabi’s sovereign wealth fund and Singapore state investment firm Temasek Holdings (Pvt.) Ltd, a day ahead of the IPO.

Bandhan Bank, which counts Singapore sovereign wealth fund GIC Pte. Ltd and International Finance Corporation (IFC) among its backers, has set a price band of Rs 370-375 per share for the IPO.

VCCircle had reported that IFC will churn dream returns from its partial exit through the Bandhan Bank IPO.

Bandhan Bank, which was India’s first microfinance lender to receive a universal banking licence, is seeking Rs 44,730.18 crore ($6.86 billion) in valuation from its maiden public offering.

The public issue comprises a fresh issue of 97.66 million shares worth Rs 3,662.39 crore at the upper end of the price band, besides a secondary market sale by IFC – directly and through its fund IFC FIG Investment Company.

In all, IFC is selling 21.61 million shares out of the 54.04 million shares it held in Bandhan Bank. After the IPO, IFC will have a 2.71% stake in the company after accounting for the fresh issue of shares, VCCircle estimates show.

The total IPO size is Rs 4,473 crore ($686.56 million) and will see a 10% stake dilution on a post-issue basis.

The promoter entity, Bandhan Financial Holding Ltd’s stake will fall to 82.28% after the issue from the existing 89.62%. The promoter will get three years, from the date of listing, to bring its stake down to 75%, to comply with the minimum public float norms by SEBI.

The microfinance lender had filed its draft prospectus on 1 January. It had received regulatory nod on 28 February.

Microlenders Equitas Holdings Ltd and Ujjivan Financial Services Ltd, which had started operating as small finance banks, had gone public in early 2016.

Last year, Kedaara Capital-backed AU Small Finance Bank had also floated an IPO that was heavily subscribed. The lender’s shares had jumped 50% on debut.

Kotak Mahindra Capital Co, Axis Capital, Goldman Sachs (India) Securities, JM Financial Institutional Securities, and JP Morgan India are merchant bankers managing the IPO.

For more details of Bandhan Bank’s IPO, click here.

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IFC-backed Bandhan Bank’s IPO subscribed 88% on day 2

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