GIC-Backed Bandhan Bank Files IPO Papers With SEBI

Bandhan Bank Ltd., the first Indian microfinance lender to get a banking permit, filed for an initial public offering with the market regulator to comply with the central bank's norms that require a bank to go public within three years of starting operations.

The Kolkata-based lender, which is backed by Singapore sovereign fund GIC Pte, will sell more than 11.92 crore shares in its offer, according to its statement. That comprises a fresh issue of over 9.76 crore shares and an offer for sale by World Bank's arm International Finance Corporation and its fund for the rest.

The book running lead managers to the issue are Kotak Mahindra Capital Co. Ltd., Axis Capital Ltd., Goldman Sachs (India) Securities Pvt. Ltd., JM Financial Institutional Securities Ltd. and JP Morgan India Pvt. Ltd.

Bandhan Bank had a net interest margin of 10.01 percent in the quarter-ended September 30, among the highest among banks in the country, while its bad-loan ratio was 1.43 percent, according to company filings.

The erstwhile microlender had received the universal bank licence from the Reserve Bank of India in 2014 and started its operations in August 2015.

Bandhan Bank gets 90 percent of its deposits from its microfinance business. And that's going to remain a focus area, said Managing Director Chandra Shekhar Ghosh. "We will also continue this focus given the high level of demand and untapped geographies for microfinance," he told BloombergQuint in an interview.

The company will focus on its four-point strategy to maintain and improve its performance in coming years, he said.

They are:

• Quick delivery of credit without any hazards
• Doorstep delivery of credit
• Weekly instalments which helps in maintaining a good repayment rate.
• Maintaining a good relationship with borrowers by periodic meetings, to maintain the repayment rate.

Here is the full interview