The shares in Bandhan Back was bought by BlackRock Inc. and Singapore’s GIC Pte as the main shareholder of India’s most profitable bank sold 106 billion rupees ($1.4 billion) of its stake to meet the regulator’s ownership rules. The headquarters of Bandhan bank is located in Kolkata.
It is a subsidiary of Bandhan Financial Holdings Limited (BFHL). Bandhan Financial Holdings Limited is a wholly-owned subsidiary of Bandhan Financial Services Limited (BFSL), which is a real estate company. The founder and Chief Executive Officer of Bandhan Bank Mr. Chandra Shekhar Ghosh said than other than these two companies, Temasek Holdings Pte and SBI Mutual Fund also bought shares of them. He also added that GIC got the Reserve Bank of India’s approval to raise its stake in the lender to 10% from 4.9%,
On Monday the Bandhan Financial Holdings Ltd. sold 337.4 million shares in the Indian lender at 313.1 rupees in a block trade in which a 9.3% discount to the last closing price, according to deal terms seen by Bloomberg News. Their shares were plunged from 10.5% to 308.8 rupees in Mumbai after the transaction, its biggest loss since March 30.
The branch expansion of Bandhan bank was restricted by the Central Bank. They specialized in lending to small borrowers after the founding firm failed to lower its stake to 40% last year. Then the Bandhan Bank agreed to combine with mortgage financier-Gruh Finance Ltd. in a deal of $11.7 billion to pare the founder’s stake as mandated, following which the central bank partially relaxed its curbs on the lender.
Mr. Karthik Srinivasan, the group head for financial sector ratings at ICRA Ltd said that the Reserve Bank of India is very clear that shareholding in private banks should be diversified as it reduces the concentration of risk. The urgent sale of stake by the bank indicates that RBI is on track on its rules regarding shareholding in private banks. Now the central bank is reviewing their norms on shareholding in private banks, which stipulate founders cut their stake to 15% eventually, as it aims to improve corporate governance.
