Subscribe to Bandhan Bank IPO : AUM Capital

Incorporated in 2014, Bandhan Bank Ltd. (BBL) is a commercial bank focused on serving under banked and underpenetrated markets in India. The bank currently offers a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services such as debit and credit card facilities, internet and mobile banking, online bill payment services and the distribution of third-party general insurance and mutual fund products etc. With a network of 2633 doorstep service centres (DSCs) and 9.86 mn micro loan customers, the bank has very strong hold in microfinance. The bank focusses on expanding its geographical reach in the near future.

Given Bandhan's strong presence in niche customer segments, formidable liability franchisee and capable management; its profitability will be superior to conventional banks and NBFCs. The bank's focus on underpenetrated regions and new products will ensure that its strong loan book growth continues in future (Loan growth of 41% as on Q3FY18). Further, its relentless focus on cost will enable BBL to generate industry leading RoA/RoE in the long run (annualized pre IPO RoA/RoE of 3.8%/23.6% for 9MFY18). BBL is being offered at P/ABV of 5.0x & P/E of 35.0x on post diluted basis leaving reasonable scope for appreciation for investors and thus we recommend subscribing to the issue.

Bandhan Bank Ltd. - Nirmal bang

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