Bandhan Financial Holding, which holds 82.26 percent stake in Bandhan Bank, may take the Offer for Sale (OFS) route post the proposed merger with Gruh Finance to reduce its stake in the new private sector lender.
"We cannot go for further acquisition...So, the next option is OFS," Bandhan Bank's founder and CMD Chandra Shekhar Ghosh said after announcing the fourth quarter results on May 2. While he did not share a timeline for the stake sale, he indicated that a plan was being worked out and the bank would go with the best possible way in the shortest time.
OFS is a mechanism that allows promoters to dilute or offload their holding in listed companies. Bandhan Financial Holding is 100 percent owned by Bandhan Financial Services, which is owned by IFC, SIDBI, Caladium and three trusts among others.
In September 2018, the Reserve Bank of India (RBI) penalized Ghosh and barred the lender from opening any new branches without approval, as the bank failed to bring down the promoter shareholding to 40 percent when its three-year deadline ended in August.
The merger will help bring down the holding company's shareholding to 61 percent but it is still higher than what the banking regulator has prescribed.
Ghosh said that he expects the merger process to go smoothly, as the bank has already received approvals from RBI, Securities and Exchange Board of India and the Competition Commission of India. It is now waiting for approval from the National Company Law Tribunal (NCLT). The request was filed with NCLT Kolkata bench on April 4.
The bank's loan book, 86 percent of which comprises microfinance, grew at 38.46 percent in 2018-19. Its deposits grew by 27.64 percent in the same period.
The bank expects its net interest margins (NIMs) to fall to 7 percent post merger. NIMs were at 10.69 percent in the March-ended quarter, up from 9.32 percent in the same period last year.
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