Bandhan Bank Limited IPO – Details, Price Band, Analysis

Bandhan Bank Limited – a wholly-owned subsidiary of Bandhan Financial Holdings Limited (BFSL) is planning to raise (INR 4,413.38 Cr – 4,473.02 Cr) / 119,280,494 shares. Fresh Issue (INR 3,613.56 Cr – 3,662.40 Cr) and Offer for Sale (INR799.81 – 810.62 crore) via initial public offer (IPO)

Bandhan Bank – Company Profile

• Incorporated on 23rd December 2014, Bandhan Bank Limited is Kolkata, West Bengal based commercial bank focused on (1) Micro Banking and (2) General Banking Services.
• The company currently offers a variety of asset and liability products and services designed for micro and general banking, as well as other banking products and services to generate non-interest income.
• The company has a banking license that permits it to provide banking services pan-India across customer segments.

Bandhan Bank – Product Portfolio

The bank’s product portfolio mainly covers 4 items, viz –

• ACCOUNTS – (1) Savings Accounts, and (2) Current Accounts
• LOANS – (1) Retail Loans, (2) MSME Loans, (3) Small Enterprise Loans, (4) Microloans, and (5) Agri Loans
• DEPOSTS
• NRI BANKING – (1) Deposit, and (2) Remittance

Current Network

• Bandhan Bank is driven by a constant desire to serve better. Bandhan Bank started with 501 branches, 50 ATMs, and 2022 Door step Services Centres (DCSs) on day one.
• Presently, Bandhan Bank has 3799 touch points pan India consisting of 893 bank branches, 2696 Door step Services Centres (DCSs), and 433 ATMs and serving more than 12 million customers.

Employees and Distribution Network

• Bandhan Bank has a team of nearly 27,300 employees on roll.
• The Bank’s distribution network is strong in East and Northeast India, with West Bengal, Assam and Bihar.

Company Promoters

The Promoters of the Bank are –

• Bandhan Financial Services Private Limited (BFSL) is a non-banking financial institution for purposes of carrying out non-banking financial activities without accepting public deposits.
• BFSL was accorded in-principle approval by the RBI on April 9, 2014 for setting up a bank in the private sector. The promoter of Bandhan Financial Holdings Limited (BFHL) is BFSL.
• Financial Inclusion Trust (FIT) is an irrevocable charitable trust with objectives including inter alia eliminating functional illiteracy in India by making education economically relevant.
• North East Financial Inclusion Trust (NEFIT) is an irrevocable charitable trust with objectives including inter alia eliminating illiteracy in India by making education available to the underprivileged.

IPO Opening / Closing Date

IPO Details – Price, Minimum Bid and Other

Financial Performance

Revenues

Bandhan Bank shows steady revenue growth in recent years. Top-line has been increasing regularly for the last 3 years and jumped from INR 7.95 Cr in FY 2015 to INR 4320 Cr for the period ended FY 2017.

Profits

Though the company has shown steady growth in revenue, the company has also registered growth in profits in these 3 years. Starting from INR 0.6 Cr of profits in FY2015, the company’s earnings improved to INR 1112 Cr for the period ended FY 2017.

CONCLUSION –
Considering company’s valuation, financial parameters, and the sector potential in which it is operating, FinBlab recommends SUBSCRIBE ratings on Bandhan Bank IPO.

Also Read –

(1) Detail Analysis and Finblab View on up-coming BHARAT DYNAMICS LIMITED IPO

(2) Finblab’s Valuepick of the month BALKRISHNA INDUSTRIES LIMITED

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