Bandhan Bank Limited (BBL) is a commercial bank focused on serving underbanked and underpenetrated markets in India. It is Kolkata, West Bengal based commercial bank. Bandhan Bank has a license to provide banking services pan-India across customer segments. After a long wait BBL is floating their IPO in the primary markets for getting listed in the stock exchanges. I will quickly check the draft red herring prospectus of BBL to find out the issue price and grey market premium to present the Bandhan Bank Limited IPO Review for my readers.
About Bandhan Bank Limited IPO :
- IPO Opens on – March 15, 2018.
- IPO Closes on – March 19, 2018.
- Face Value – Rs. 10 Per Equity Share.
- Issue Price – Rs. 370 – Rs. 375 Per Equity Share.
- Issue Type – Book Built Issue IPO.
- Retail Allocation – 50%
- Market Lot – 40 Shares.
- Minimum Order Quantity – 40 Shares.
- Issue Size – 119,280,494 Equity Shares of Rs 10 aggregating up to Rs 4,473.02 Cr .
- Fresh Issue – 97,663,910 Equity Shares of Rs 10 aggregating up to Rs [.] Cr.
- Offer for Sale – 21,616,584 Equity Shares of Rs 10 aggregating up to Rs [.] Cr .
- Listing Exchange – BSE NSE.
- Draft Prospectus – Click Here.
Objectives of the issue:
- Fresh Issue – The Equity Shares of this bank are required to get listed on the stock exchanges within three years from the date of commencement of business of this bank.
- Offer for Sale – The selling shareholders will be entitled to the respective portion of the proceeds of the Offer for Sale net of the bank’s proportion of issue related expenses.
About The Company –
- Bandhan Bank Limited is incorporated in 2014.
- This bank offer a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services to generate non-interest income.
- Bandhan bank has strong very hold in micro finance with the a network of 2,546 doorstep service centres (DSCs) and 9.47 million micro loan customers.
- This bank has 864 bank branches and 386 ATMs serving over 1.87 million general banking customers.
- Bandhan banks distribution network is strong in East and Northeast India, with West Bengal, Assam and Bihar.
- This bank provides retail loans including micro loans, SME loans and small enterprise loans, savings accounts, current accounts and a variety of fixed deposit accounts.
- Other banking products and services including debit cards, internet banking, mobile banking, EDC-POS terminals, online bill payment services and the distribution of third-party general insurance products and mutual fund products.
- Bandhan bank has strengths of consistent track record of growing a quality asset and liability franchise, extensive, low cost distribution network, provide accessible, simple, cost-effective and innovative financial solutions, robust capital base.
- This bank’s maintaining focus on micro lending while expanding further into other retail and SME lending.
Promoters of the company :
- Bandhan Financial Holdings Limited (BFHL).
- Bandhan Financial Services Limited (BFSL).
- Financial Inclusion Trust (FIT).
- North East Financial Inclusion Trust (NEFIT).
Bandhan Bank Limited IPO Review:
Bandhan Bank is an established name in the finance market now with an expanding branch network in tier-1 and tier-2 cities. The financial data shows evenly increased profitability over the years. The earnings per share is just above 10 and the price to earnings ratio is close to 37. However the issue price band of Rs. 370 – Rs. 375 is almost four times of the last year’s book value which makes this initial public offering an expensive one. The grey market premium (GMP) is between Rs. 30 Rs. 35 at present. Hence, our Bandhan Bank Limited IPO Review is NEUTRAL on this issue at present. Investors must check our last day IPO selection method before applying in BBL IPO.