Bandhan Bank Ltd

Bandhan Bank

About the Company:

Bandhan Bank is a commercial bank focused on serving underbanked and underpenetrated markets in India. They have a banking license that permits them to provide banking services pan-India across customer segments.

Company was incorporated on 23 December 2014 and began operations on August 23, 2015 when Bandhan Financial Services Limited (“BFSL”), Their ultimate parent company, transferred its entire microfinance business to them and they simultaneously commenced general banking activities.

They currently offer a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services to generate non-interest income.

Company’s strength lies in microfinance, including a network of 2,022 doorstep service centres (“DSCs”) and 6.77 million micro loan customers. Currently they have grown to 2,546 DSCs and 9.47 million micro loan customers as of September 30, 2017.

Company had launched their general banking business on August 23, 2015 by opening a greenfield network of 501 bank branches and 50 automated teller machines (“ATMs”), which as of September 30, 2017 they have grown to 864 bank branches and 386 ATMs, together serving over 1.87 million general banking customers.

Company’s distribution network is particularly strong in East and Northeast India, with West Bengal, Assam and Bihar together accounting for 57.75% of their branches and DSCs, respectively, though the focus is to expand across India.

Branch Network:

Currently they offer a variety of asset and liability products and services designed for micro banking and general banking. Their asset products consist of retail loans including a substantial portfolio of micro loans, as well as micro, small and medium enterprise (“SME”) loans and small enterprise loans.

Company’s products consist of savings accounts, current accounts and a variety of fixed deposit accounts. Since beginning banking operations, they have built a strong base of current account and savings account deposits, which together stood at Rs.7,170 crores as of September 30, 2017, a CASA ratio of 28.18%.

In addition to loan and deposit products, they also offer other banking products and services to generate non-interest income and cater towards the additional needs of their customers.

These products and services include debit cards, internet banking, mobile banking, online bill payment services and the distribution of third-party general insurance products and mutual fund products.

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Loan Portfolio: (Region Wise)

Management Team:

  1. Dr. Ashok Kumar Lahiri (Designation: Independent Director (part-time Chairman))
  2. Mr.Chandra Shekhar Ghosh (Designation: Designation: Managing Director and Chief Executive Officer)
  3. Mr.Bhaskar Sen (Designation: Designation: Independent Director)

Special Thanks:  We would like to thank the Management Team of Bandhan Bank Ltd for inviting Markets Guruji Team to the IPO Press Conference & Listing Ceremony.


Future Growth Strategies to be Implemented by the Company:

Maintain focus on micro lending while expanding further into other retail and SME Lending:

As India’s largest micro lender in terms of overall advances, Company’s aim is to maintain their leading position in the micro lending space while expanding further into other retail and SME lending in order to capitalise on growth opportunities in India’s micro lending and banking industries.

To Expand Geographical Footprint:

Company’s strategy is to increasingly diversify their geographical footprint. Accordingly, they have increased their footprint to 33 State and Union Territories from 24 State and Union Territories since they began banking operations.

Targeting New Products & Customers:

In addition to expanding their branch network, they also have plans to develop products and services designed for rural and urban mass retail customers, as well as by continuing to actively promote our accounts and deposits, and by offering attractive interest rates.

For example, recently they had launched additional products and services designed for non-resident Indians (“NRIs”) and foreign currency remittances, in order to increase their business with the large Indian diaspora.

Moreover, Company believes that their broad micro banking platform provides them with opportunities to receive deposits from relatively underbanked and unbanked segments of Indian society as they become increasingly affluent over time.

Boost share of Non-Interest Income:

Company intends to complement income from core asset products with non-interest income from other sources in order to diversify their income stream and improve the profit margins.

Additionally, in 2017 they entered into arrangements to begin distributing third-party insurance products and third-party mutual funds, in return for which they receive a commission based upon the value of insurance product or mutual fund sold.

Company will also commence distribution of life insurance products as a corporate agent in December 2017, for which they have received a license from IRDAI.

As they expand their network,they expect to increase the size of their PSL-compliant loan portfolio as well as grow the distribution of third party products, thereby increasing their income stream from both sources.

Company has also commenced inward and outward foreign currency remittances. The service is made available to non-resident Indians (“NRI”) and resident Indian customers within defined regulatory guidelines. These remittance services will provide a further stream of non-interest income.

Did You Know? Bandhan Bank is the largest player in the Micro-Finance space:

Bandhan Bank has the largest overall gross micro-banking asset portfolio, with Rs.21,380 crores as of March 2017, (also counting gross advances, which includes IBPC/Assignment, in the microfinance segment).

Amongst the banks (private as well as public), the outstanding loans given by Bandhan Bank is more than three times higher than its closest competitor, the State Bank of India.


Positives for the Company:

  • Experienced and professional team, backed by strong independent board.
  • Operating Model Focused on Serving Underbanked and Underpenetrated Markets.
  • Consistent Track Record of Growing a Quality Asset and Liability Franchise.
  • Extensive, Low Cost Distribution Network.
  • Consistent Financial Performance and Robust Capital Base.


Financials of the Company:

(in Crores) FY 15 FY 16 FY 17 30th Sept 17
Revenue  7.9  1731.25  4320.12  2618.08
Net Profit  0.57  275.24 1111.95  657.65


Valuation of Peer Group Companies:

Company Name Face Value EPS PE Ratio RoNW NAV
Bandhan Bank Ltd 10 10.15 36.94 25.01% 40.60
Axis Bank Ltd 2 16.54 32.26 7.04% 235.41
HDFC Bank Ltd 2 59.95 30.75 16.65% 358.21
IndusInd Bank Ltd 10 48.06 34.59 13.90% 344.91
ICICI Bank Ltd 2 17.51 17.43 10.84% 179.63
IDFC Bank Ltd 10 3.00 18.20 7.24% 43.18
Kotak Mahindra Bank 5 26.89 37.37 12.86% 209.09
RBL Bank Ltd 10 12.61 41.21 10.29% 115.57
AU Small Finance Bank 10 11.73 59.53 38.33% 69.92


IPO Details:

Details Info
Issue Opens on 15th March 2018
Issue Closes on:. 19th March 2018
Issue Price Rs.370 – 375
Face Value Rs.10
Minimum Lot 40 shares
Minimum Investment Rs.15,000
Issue Constitutes 9.99%
Issue Size Rs.4473 cr ($670 Million)
Market Cap Rs.44,730 cr ($6.7 Billion)
Listing at NSE & BSE
Equity Shares Offered (Fresh) 9,76,63,910
Equity Shares Offered (OFS) 2,16,16,584
Total Equity Shares Offered (OFS + Fresh) 11,92,80,494
Equity Shares Prior to the Issue 109,51,41,034
Equity Shares after the Issue 119,28,04,944


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Important Dates:

Finalization of Basis of Allotment on or Before 22nd March 2018
Initiation of Refunds on or Before 23rd March 2018
Credit of Equity Shares: on or Before 26th March 2018
Listing Date: on or Before 27th March 2018

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IPO Valuation Parameters:

Earnings Per Share (EPS) Price To Earnings ratio (PE) Return on Net Worth (RoNW) Net Asset Value (NAV)
10.15 36.94 25.01% 40.60


Markets Guruji Opinion:

IPO View Apply For: Expected listing Gain:
Subscribe Long Term 15%


Subscription Details: (Will be Updated)

(Subscription-Category-Wise (no. of times) Till time : 06:00 PM) Shares Offered Day-1 Day-2 Day-3
QIB  2,38,56,099  1.26  2.33   22.25
NII  1,78,92,075  0.008 0.24   8.06
Retail  4,17,48,173  0.12  0.33  1.21
Employee       ———  —–  —–  —–
TOTAL  8,34,96,347  0.42  0.88  8.69


Grey Market Premium :

Date IPO Price Band Grey Market premium Kostak Rates
08/03/18 Bandhan Bank Ltd 370 – 375 25 – 29 750 – 850


Check IPO Allotment Status:

Karvy Website (Click on the below Link)


Company Contact Info:
Bandhan Bank Ltd
DN 32, Sector V, Salt Lake
Kolkata 700 091
Tel: (033) 6609 0909
Fax: (033) 6609 0502


IPO Registrar Info:
Karvy Computershare Private Limited
Karvy Selenium Tower B, Plot
31-32 Gachibowli, Financial
District Nanakramguda Hyderabad 500 032
Tel: (91 40) 6716 2222
Investor email: