Bandhan Bank stock falls 10% to hit lower circuit, as promoter explores stake sale, IPO to facilitate investor exits

Bandhan Bank

• Bandhan Bank shares drop 7% on stake sale news
• Promoter may sell stake or launch IPO to exit long-term investors
• Jefferies hired to explore options; board discussed restructuring

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Shares of Bandhan Bank Ltd fell sharply on Monday, hitting lower circuit in the afternoon trade after reports that its promoter, Bandhan Financial Services, is exploring options such as a stake sale or an IPO (initial public offering) to facilitate exits for long-term investors. Bandhan Bank stock was locked at the 10 percent lower circuit of Rs 157.95, also making it the top loser on the BSE Midcap index. The stock had gained roughly 30 percent in the one year prior to today’s fall.

Bandhan Financial Services has engaged global investment banker Jefferies to explore potential options, including selling shares to private equity investors or launching an IPO, reported The Economic Times, citing unidentified sources. The move is aimed at providing an exit route for long-term institutional investors such as International Finance Corporation (IFC) and GIC Ventures, while also helping address regulatory requirements related to promoter shareholding in Bandhan Bank. Promoter group entities own 39.74 percent stake in the bank.

• Also read | DBS Bank India to foray into equity capital markets business

The matter was discussed at a board meeting of Bandhan Financial Services on Monday, the ET report said. The investment banker has been tasked with gauging interest among potential investors, particularly private equity funds. The proposed restructuring would allow existing investors to monetise their holdings while enabling the promoter group to reduce its stake in the bank in line with regulatory norms.

Bandhan Financial Services currently serves as the promoter entity of Bandhan Bank. The strategic move to explore stake sales or an IPO is seen as part of a broader effort to optimise the ownership structure while maintaining regulatory compliance.

In a separate development, in February, the Reserve Bank of India approved a proposal by SBI Mutual Fund to acquire an aggregate holding of up to 9.99% in Bandhan Bank.

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