Bandhan promoters to sell 21% for $1.4bn in block deals

MUMBAI: Bandhan Financial Services, the main promoter of Bandhan Bank, has mandated four brokers to jointly sell nearly 21% in the bank, or about 34 crore shares, through block deals on Monday. The deal size could be as much as $1.4 billion (about Rs 10,400 crore), making it the biggest block deal in the banking, financial services and insurance (BFSI) space.
According to the term sheet of the deal, the stake is being offered at a floor price of Rs 311 per share, which is at nearly 10% discount to the stock’s closing price of Rs 345 on Friday on the NSE. Goldman Sachs, Credit Suisse, JM Financial and J P Morgan have been mandated to manage the deal. The book for the deal opened on Sunday evening and was fully subscribed by late evening, broking sources said.
After the deal, promoters’ stake in the bank will be down to about 40%, according to shareholding pattern on the BSE. Under the RBI’s rules, the main promoting company of a bank should reduce its stake in the lender to a maximum of 40% within three years of starting operations, a condition that the bank had failed to meet despite some serious efforts made by its promoters.

From being a microfinance lender, Bandhan transformed itself into a full-fledged bank exactly four years ago. In March 2018, the lender was listed on the bourses and in September that year, the RBI had imposed several restrictions on Bandhan Bank, including a ban on opening new branches since its promoters had failed to comply with the shareholding norms. In January 2019, Bandhan Bank acquired Gruh Finance from HDFC and, post-merger, promoters’ stake was down to 61%.
At Rs 10,400 crore, the Bandhan Bank block deal will be ahead of the Rs 10,200-crore deal in HDFC in 2012 in which Citibank was the seller.