International finance Corporation (IFC), the private sector investment arm of World Bank, is looking to acquire a minority stake in Bandhan Bank and also simultaneously raise its holding in its parent and India's top microfinance firm Bandhan Financial Services Pvt Ltd by investing around Rs 580 crore (approximately $94 million), as per a disclosure.
IFC is an existing investor in Bandhan Financial and this proposed investment would enlarge its commitment to the group while separately backing its upcoming retail bank.
Bandhan was one of the two financial services firms selected last year to get an in-principle approval for setting up a new bank in India, along with IDFC.
IFC had previously invested $30 million to buy a minority stake in Bandhan Financial in 2011. Last Year it invested $26.68 million more in Bandhan through subscription to non-convertible debentures (NCDs).
Other shareholders of Bandhan Financial include SIDBI, Financial Inclusion Trust and North Eastern Financial Inclusion Trust.
Bandhan Financial, currently registered as an NBFC-MFI, is India’s largest microfinance institution in terms of number of borrowers and outstanding portfolio. Headquartered in Kolkata, West Bengal, it has a borrower base of more than 6.1 million women and a loan portfolio of approximately Rs 7,800 crore (close to $1.3 billion).
It operates through more than 2,000 branches in 22 Indian states.
The firm is looking forward to transform itself into a universal bank focused on low income households. It aims to expand and diversify its operations to include a range of products such as savings, remittances, payments, etc.
IFC has backed several Indian firms in the financial services domain, including Magma Fincorp, AU Financiers, Religare Enterprises, Yes Bank and Axis Bnak.
(Edited by Joby Puthuparampil Johnson)