Bandhan Bank Shares Fall 12% as Promoter Considers Exit Options

The share price of the Kolkata-headquartered financial services company Bandhan Bank fell sharply on the first trading day of the week. 

On Monday, the value of Bandhan Bank’s stock dropped to ₹153.94, down by over 12% from the previous closing price of ₹175.50. The stock plummeted by 10.25% over the past five trading days.

Private Stake Sale or IPO

Bandhan Bank saw significant losses following reports that its promoter, Bandhan Financial Services, is exploring options to provide an exit route for long-term investors, which include GIC Ventures and International Finance Corp (IFC). 

The idea is reportedly to either hold a private stake sale or an initial public offering (IPO).

Citing unidentified sources, the Economic Times reported on Friday that  during a meeting last Monday, the Bandhan Financial board already discussed two potential exit routes for investors: the first is selling shares to private equity funds and second is floating an initial public offering.

The report said that Bandhan Financial Services already engaged global investment banker Jefferies to gauge investor interest.

Higher Valuation for Bandhan Financial Services

The board reportedly discussed during the deliberation that holding a sale to private equity investors would fetch higher valuation for Bandhan Financial Services, which holds 39.74% stake in Bandhan Bank. 

The board suggested setting a June deadline for the stake sale and if this does not materialize by the time, the alternative will be an IPO.

Reducing Stake to 26% by 2030

The move aligns with the regulatory mandate that requires Bandhan Financial Services, which still holds a sizable interest in Bandhan Bank, to reduce its stake to 26% four years from now.

“The promoter holds a little below 40% now and it may think of a phased reduction,” said a person close to the bank, according to the Economic Times.