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Incorporated on December 23, 2014, Bandhan Bank Limited ( Bandhan Bank) is a commercial bank focused on serving under-banked and underpenetrated markets in India. It has a banking license to provide banking services pan-India across customer segments. Bandhan Bank currently offers a variety of asset and liability products and services designed for micro banking and general banking. Apart from this, the bank also has other banking products and services to generate non-interest income.
The bank’s strength lies in microfinance, it has a network of 2,633 doorstep service centres (DSCs) and 9.86 million micro loan customers as of December 31, 2017. To complement its micro loan business, Bandhan Bank has also focused on creating a strong general banking business. Its general banking business was launched on August 23, 2015 with a greenfield network of 501 branches and 50 automated teller machines (“ATMs”), which, as of December 31, 2017 has grown to 887 bank branches and 430 ATMs, together serving over 2.13 million general banking customers.
Its distribution network is particularly strong in East and Northeast India, with West Bengal, Assam and Bihar together accounting for 56.37% and 57.58% of the banks’ branches and DSCs as of December 31, 2017, respectively.
- Rs. 4413.38 crore to Rs. 4473.02 crore; Issue of 11, 92, 80,494 equity shares;
Fresh issue - 9, 76, 63,910 equity shares; offer for sale - 21,616,584 equity shares - 40 equity shares and in multiple thereafter
- QIB - 50% NIB - 15% Retail - 35%
- Rs. 10
- ASBA mandatory (No cheques will be accepted)
- Proposed to be listed on BSE and NSE
- Kotak Mahindra Capital Company Ltd, Axis Capital Ltd, Goldman Sachs (India) Securities Private Ltd, JM Financial Ltd, J.P. Morgan India Private Ltd
- Karvy Computershare Private Limited
- Operating model focused on serving under-banked and underpenetrated markets (microfinance)
- Consistent track record of growing a quality asset and liability franchise
- Extensive, low cost distribution network
- Customer centric approach - provides accessible, simple, cost-effective and innovative financial solutions
- Consistent financial performance and robust capital base
- Experienced and professional team, backed by strong independent board
The Offer comprises the fresh issue and the offer for sale.
Fresh issue-
The proceeds from the issue will be used to augment Bandhan Bank’s tier-I capital base to meet its future capital requirements. It will also be used towards meeting the expenses in relation to the issue.
Offer for sale-
The selling shareholders will be entitled to the respective portion of the proceeds of the offer for sale net of their proportion of issue related expenses. Bandhan Bank will not receive any proceeds from the offer for sale.
Other than listing fees, payment of issue expenses will be shared proportionately as mutually agreed amongst the Bank and the Selling Shareholders and in accordance with applicable law, upon the successful completion of the Issue and such payments shall be made as stipulated in the Cash Escrow Agreement. In the event the Issue is withdrawn or not completed for any reason whatsoever, all Issue related expenses shall be borne by the Bank.
An initial public offering (IPO)/public issue is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves the way for listing and trading of the issuer’s securities.
The shares are initially issued in the primary market at an offering price determined by the lead manager(s)/the merchant banker(s) to the IPO.
The primary market consists of a syndicate of investment banks and broker dealers that the lead managers assemble and that allocate shares to institutional, high net worth individuals (HNI) and individual/retail investors.
As far as IPOs are concerned, a price band is a value-setting method whereby a seller indicates an upper and lower cost range, between which the buyers/investors are able to place their bids. The price band's floor and cap provide guidance to the buyers.
It is up to the company to decide on the IPO price or the price band, in consultation with the lead managers.
The basis of IPO price is disclosed in the offer document. The issuer is required to disclose in detail about the qualitative and quantitative factors justifying the IPO price.
The IPO price is normally based on such factors as the company’s financials, products and services, income stream as well as the demand for the shares and current market conditions.
The lead managers must determine a fair offering price, which takes into consideration the need for the company to raise capital while offering the new issue at a price which represents a fair value of the shares.
A Red Herring Prospectus (RHP) is a document submitted by a company (issuer) as part of a public offering or an IPO of securities (either stocks or bonds).
A retail individual investor means an investor who applies or bids for securities of or for a value of not more than Rs 2,00,000.
Yes. He can bid in a book-built IPO for a value not more than Rs 2,00,000. Any bid made in excess of this will be considered in the HNI category.
Yes. Investors can change or revise the quantity or price in the bid using the form for changing/revising the bid that is available along with the application form. However, the entire process of changing or revising the bids shall be completed before the IPO closes.
In case of fixed price issues, investors are intimated about the CAN/Refund order within 10 days of the closure of the IPO.
In case of book built IPOs, the basis of allotment is finalised by the book-running lead managers within two weeks from the closure of the issue. The registrar then ensures that the demat credit or refund as applicable is completed within 6 working days of the closure of the issue.
In the case of book-built issues, the exchanges (Bombay Stock Exchange/National Stock Exchange) display the data regarding the bids obtained (on a consolidated basis between both these exchanges).
The data regarding the bids is also available category-wise.
Investors are entitled to receive a Confirmatory Allotment Note (CAN) in case they have been allotted shares within 6 working days from the closure of a book Built issue. The registrar has to ensure that the demat credit or refund as applicable is completed within 6 working days of the closure of the book-built issue.
The lead managers also publish an advertisement at least in an English national daily with wide circulation, one Hindi national paper and a regional language daily circulated at the place where registered office of the issuer company is situated.
The listing on the stock exchanges is done within seven days from the finalisation of the issue.
Ideally, it would be around three weeks after the closure of the book-built issue.
In case of fixed price issue, it would be around 10 days after closure of the issue.